Operating labour costs

Brushing Suitable for use on most articles, but use limited for economic reasons. Results rely almost entirely on skill of the operator Labour cost is high... 

Typical units for productivity are kg m 3 h 1. Factors that influence productivity include the production time of the fermentation, the time required to dean and set up the reactor, the sterilisation time and the length of the lag phase of growth. Figure 2.2 shows how total productivity and maximal productivity can be calculated for a batch fermentation. The dedsion as to when the fermentation is terminated (maximum or total productivity) depends on the operating costs, which include the capacity of the fermentation vessel, energy costs and labour costs. 

If the minimal number of operators necessary to run the plant is for example 10 in a 4 shift system all the year through, than there is a total of 40 operators on the payroll. At an average salary of 20,000 a year, the total direct costs for labour are 800,000. 

A useful example of sustainable design comes from BASF, and their development of the eco-efficiency tool. This tool seeks to integrate the combined aspects of each of the three pillars in an attempt to quantify the most sustainable products and illustrates some of the concerns associated with evaluating sustainable products. For example, the economic analysis includes a total cost of ownership that goes beyond the purchase price of a product to incorporate the cost of operation, the cost of environmental health and safety, and the cost of labour. Thus, even though a product may have a lower purchase price, it may be more expensive to use and thus costlier over the total life cycle of the product. 

This item will include the cost of maintenance labour, which can be as high as the operating labour cost, and the materials (including equipment spares) needed for the maintenance of the plant. The annual maintenance costs for chemical plants are high, typically 5 to 15 per cent of the installed capital costs. They should be estimated from a knowledge of the maintenance costs on similar plant. As a first estimate the annual maintenance cost can be taken as 10 per cent of the fixed capital cost the cost can be considered to be divided evenly between labour and materials. 

Chemical plants do not normally employ many people and the cost of operating labour would not normally exceed 15 per cent of the total operating cost. The direct overhead charges would add 20 to 30 per cent to this figure. 

As a rough estimate the cost can be taken as 20 to 30 per cent of the operating labour cost, or 2 to 4 per cent of the total production cost. 

The plant overhead cost is usually estimated from the total labour costs operating, maintenance and supervision. A typical range would be 50 to 100 per cent of the labour costs depending on the size of the plant and whether the plant was on a new site, or an extension of an existing site. 

Fixed costs 5. Maintenance 6. Operating labour 7. Laboratory costs 8. Supervision 9. Plant overheads 10. Capital charges 11. Insurance 12. Local taxes 13. Royalties 5-10 per cent of fixed capital from manning estimates 20- 23 per cent of 6 20 per cent of item (6) 50 per cent of item (6) 10 per cent of the fixed capital 1 per cent of the fixed capital 2 per cent of the fixed capital 1 per cent of the fixed capital... 

In the first years of operation, operating persoimel are required to a level of 75 h/day, seven days per week for monitoring (note that chemical and radionuclide analyses are not included in this costing), visual inspection and minor repair works. These expenses will be reduced over time when more statistical data become available from the wetland operation. Labour costs are estimated at about 30/h. 

Among direct production costs, we can list raw materials, utilities, direct operation labour, maintenance, catalysts, royalties, etc. In our case, solvents (THF and pressurised CO2), polymer, and active ingredient are needed on a daily basis. The corresponding quantities were determined using the process simulator, as described in paragraph 8.3.3. In this discussion, additional solvent (THF) losses are supposed to equal 5% of the total flow rate entering the... 

Machining operations are expensive due their high cost of labour. This does not so much count if only a small number of products have to be made. For mass-production injection moulding is more economical, also with respect to the much lower material losses. 

Three flow sheets with consistent assumptions, and using commercially available equipment where possible, were developed. The flow sheets and mass and energy balances were used to generate sized equipment lists. Estimated costs for unit operations are based on industry databases for materials and labour, and on the estimates of technical experts from associated research and development programmes. Installation costs, including labour and field bulk materials, were estimated on a subsystem basis. 

The capital cost of a pipeline depends upon such factors as pipe diameter, distance and the amount of compression required. Undersea pipelines cost about double land-based pipelines. Operating costs reflect labour charges and fuel usage in compression if required. 

Labour, Maintenance and Administrative Costs. As a general rule, labour and maintenance were each charged at the rate 3% of the capital per annum. For labour, this included both direct and indirect labour costs. For maintenance, this included both materials and labour. Over the past decades, many companies have made attempts to reduce the operating labour and maintenance charges. Labour can be reduced by extensive computer control. However, the success or otherwise, in reducing the maintenance charge is difficult to quantify, several operations have suffered major problems claimed to be due to the cutbacks in maintenance costs. Administrative costs are basically insurance and local land taxes. A value of 1.5% of the fixed capital as an annual charge was used. 

The other question to ponder is how these different types of company will address the relationship with academia. The availability of finance and the cost of labour will determine what type of company will be based in the UK, and that in turn will control the interaction between industry and the universities. If the headquarters is in the UK for historical reasons, but the operating divisions and units are in other countries, why would they invest in UK academic polymer science ... 

Because of Its high cost and labour demands —It requires the almost continuous attention of one or two operators— the SMAC Is only affordable by large hospitals requiring high throughputs. 

Table 15.11 presents data for the estimation of operating costs based on the above decomposition. The basis is the material and heat balance from flowsheeting, as well as the operating labour. This checklist can be used to compute the operating costs for profit and cash flow calculation. Note that the depreciation charge should be excluded, if it is accounted separately. 

Direct costs (DC) Raw materials Operating labour (OL) Direct Supervisory Utilities Maintenance and repairs Operating supplies Laboratory charges Patents and royalties From material balance (10-50% )TOC From manpower (10-20% TOC) 20% OL From energy balance (10-20% TOC) 10% Fc 1 % Ff. (6%OL) 10-20%OL 0-6% TOC... 

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