Direct costs operating supplies

Miscellaneous Direct Costs Estimates for the cost of maintenance and repairs, operating supplies, royalties, and patents are best based on company records for similar processes. A rough average value for the annual cost of maintenance is 6 percent of the capital cost of the plant. This percentage can vaiy from 2 to 10 percent, depending on the severity of plant operation. Approximately half of the maintenance costs are for materials and half for labor. Royalty and patents costs are in the order of 1 to 5 percent of the sales price of the product. 

Direct costs are costs for maintenance of materials, operating of supplies labour, control direct costs laboratory etc. 

These are the costs for operations, maintenance, operating overhead, and property insurance and taxes, costs that are independent of throughput. For operations, 3 operators are assumed over five 40 hr shifts/wk, at a cost of 18/operator-hr, giving 561,600/yr. When adding direct salaries and benefits ( 84,200/yr), and operating supplies and services ( 33,700/yr), 680,000/yr are estimated for operations. To these, estimates of maintenance ( 800,800/yr), operating overheads ( 246,500/yr), and property insurance and taxes ( 246,500/yr) are added, to give atotal fixed cost of 1,882,000/yr. 

Secondly, there is variable expenditure (production, recurrent, working or operating costs) which includes the costs of supplies and stocks of raw materials, emphasising the need for efficient monitoring of the mass-balance of the process, energy, labour and overheads. Overheads include direct overheads such as rates, insurance, administrative staff etc. and indirect overheads such as a share in head office salaries and upkeep. This is an important distinction because whereas local management can have little direct influence in overheads costs and capital and utility expenses, they can have a big control over variable expenditure. 

Direct production costs include expenses directly associated with the manufacturing operation. This type of cost involves expenditures for raw materials (including transportation, unloading, etc.,) direct operating labor supervisory and clerical labor directly connected with the manufacturing operation plant maintenance and repairs operating supplies power utilities royalties and catalysts. 

The total product cost per unit of time may be divided into the two classifications of operating costs and organization costs. Operating costs depend on the rate of production and include expenses for direct labor, raw materials, power, heat, supplies and similar items which are a function of the amount of material produced. Organization costs are due to expenses for directive personnel, physical equipment, and other services or facilities which must be maintained irrespective of the amount of material produced. Organization costs are independent of the rate of production. 

Companies usually include in the charge for overhead the following items operating supplies, supervision, indirect payroll expenses, plant protection, plant office, general plant overhead, and control laboratory. This overhead charge is frequently taken as an equivalent percentage of the direct labor cost. 

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... 

Direct costs are composed from the costs of raw materials RAf), utilities Ut), operating labour (OL), direct supervision and clerical labour Ds), maintenance and repairs (M), operating supplies (Os), laboratory charges (Lab), patents and royalties. We may neglect the last term. By using the factors in Table 15.10 we obtain ... 

To obtain the total annual labor-related operations cost, O, direct salaries and benefits for supervisory and engineering personnel at 15% of DW B and operating supplies and services at 6% of DW B are added to DW B. In addition, 52,000/(operator/shift)-yr for technical assistance to manufacturing and 57,000/(operator/shift)-yr for control laboratory are added. An estimate of the total annual cost of labor-related operations is illustrated in the following example. 

While the authors describe the CCR in the eontext of a single manufacturing operation, it also has important implications for supply chains. This is particularly true given the trend toward fewer partieipants in the supply chain. From a cost point of view, it provides a different perspective for understanding an activity s real cost if that activity happens to be a CCR. It also has implications for directing cost reduction efforts. 

A systematic analysis is needed to optimize biomass value added ecologically and economically. First, the operational stages of a t5 ical supply chain are analyzed. Then, select factors that influence auf direct and indirect supply and logistics costs are mapped. 

In the above example, 1 lb of initial steam should evaporate approximately 1 lb of water in each of the effects A, B and C. In practice however, the evaporation per pound of initial steam, even for a fixed number of effects operated in series, varies widely with conditions, and is best predicted by means of a heat balance.This brings us to the term heat economy. The heat economy of such a system must not be confused with the evaporative capacity of one of the effects. If operated with steam at 220 "F in the heating space and 26 in. vacuum in its vapor space, effect A will evaporate as much water (nearly) as all three effects costing nearly three times its much but it will require approximately three times as much steam and cooling water. The capacity of one or more effects in series is directly proportional to the difference between the condensing temperature of the steam supplied, and the temperature of the boiling solution in the last effect, but also to the overall coefficient of heat transfer from steam to solution. If these factors remain constant, the capacity of one effect is the same as a combination of three effects. 

Operating costs include the costs of raw materials, direct operating labor, labor supervision, maintenance, plant supplies, utilities (steam, gas, electricity, fuel), property taxes, and insurance. Sometimes certain operating cost components are directly expressed as a fraction of the capital investment cost. Table B.3 is a brief checklist... 

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