Estimate the Cost

Design and Development of Biologieal, Chemieal, Food and Pharmaeeutieal Produets S. Kill and M.E. Vigild 2007 John Wiley Sons, Ltd 

In the first grouping each cost is considered to belong to one of three groups  

When you first see the administration of an organization it will probably be some variant of this grouping method. You will see the costs of your team or department, all subdivided into project accounts. You will probably not see the depreciation this is handled by the bookkeepers. As we shall see, this grouping is not as sharp as one might wish the division is a bit arbitrary. 

The second way of grouping costs is used to analyse the cost of manufacturing operations. Here we consider costs to be either  

In our match factory, the cost of equipment and of management would be regarded as fixed you cannot change these costs much on a short term. The cost of red phosphoms is variable the more matches you make, the more phosphoms you have to buy. Costs are never tmly fixed you can increase the size of management if the company expands. Also they seldom rise in a completely linear fashion with production - if you expand production you may be able to get phosphoms with a discount. So, tme variable costs do not exist either. Even so, the division is useful for discussing more-or-less stable operations. 

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The planning details will also allow the engineer to estimate the costs, which in combination with other data will allow an evaluation of the profitability of the project. 

Pilot plant costs range from 10,000 to 10,000,000, but the majority are typically in the range of 50,000 to 250,000, assuming an existing facihty is available to house them. There are three basic methods for estimating the costs to design and constmct a pilot plant similarity, cost ratios, and detailed labor and materials. 

Typical methods are those of F. C. Zevnik and R. L. Buchanan [Chem. Eng. Progi , 59, 70-77 (Feb. 1963)] and J. H. Taylor Eng. 6-Proc. Econ., 2, 259-267, 1977). The former is mainly a graphical method of estimating the cost per functional unit (Cp) based on the capacity, the maximum pressure, the maximum temperature, and the materials of construction. The Taylor method requires the determination of the costliness index, which is dependent on the complexity of the process. A simpler method was suggested by S. R. Timms (M.Phil. thesis, Aston University, England, 1980) to give the battery hmits cost for gas phase processes only in U.S. dollars with a Marshall and Swift index of 1000. The simple equation is... 

Piping Estimation The cost of fabrication and installation of process-plant piping appears to range from 18 to 61 percent of the FOB equipment cost as indicated in Table 9-56. This would normally represent about 7 to 15 percent of the installed plant cost and is obviously a significant item. The various available piping-estimation methods are as follows ... 

In any case, like frequency analysis, examining the uncertainties and sensitivities of the results to changes in boundary conditions and assumptions provides greater perspective. The level of effort required for a consequence analysis will be a function of the number of different accident scenarios being analyzed the number of effects the accident sequence produces and the detail with which the release, dispersion, and effects on the targets of interest is estimated. The cost of the consequence analysis can typically be 25% to 50% of the total cost of a large QRA. 

In reaction engineering, laboratory catal54ic reactors are tools or instruments to study how catalysts behave in some desired reaction. Quantitatively, the investigator wants to know how much of the desired product can be made per unit weight of catalyst, how much raw material will be used, and what byproducts will be made. This is the basic information needed to estimate the costs and profitability of the process. The economic consequence of our estimates also forces us to clarify what the rate limiting steps are, and how much transfer processes influence the rates, i.e., everything that is needed for a secure scale-up. Making the... 

Early in the life of a project, information has not been developed to allow definitive cost estimates based on material takeoff and vendor quotes for equipment. Therefore, it is necessary to estimate the cost of a facility using shortcut methods. The first step is to develop or check flow-sheets, major equipment sizes, and specification sheets as described in earlier chapters. From the equipment specification sheets, the cost of each piece of equipment is estimated, using techniques discussed later. Once the major equipment cost has been estimated, the total battery limit plant cost can he quickly estimated using factors developed on a similar project. 

Other methods for estimating the cost of vessels and fractionators can be used, but weight is usually the best. The cost of fractionators can be correlated as a function of the volume of the vessel times the shell thickness, with an addition for the cost of trays based on their diameter (Reference 13). Fractionator costs can also be correlated based on the volume of the vessel with the operating pressure as a parameter. This requires a great deal of data and does not give as good a correlation as weight. Hall et al. (Reference 14) present curves of column diameter vs. cost. 

Guthrie. K. M., Estimating the Cost of High-Pressure Equipment, Chemical Engineering, Dec. 2, 1968, pp. 144-148. 

Size Factoring Exponents It is possible to estimate the cost of equipment from the cost of a similar piece of equipment with different size using size factoring or scaling exponents as follows ... 

In order to illustrate the use of cost indices and scaling factors, let us consider the following example. In 1992, the cost of a 50 m shell-and-tube beat exchanger was 24,000. Estimate the cost of a 100 m shell-and-tube heat exchanger of a similar type and materials of construction in 1996. 

Take advantage of corporate experience with other Quality Management projects when preparing your cost estimate. This will provide actual costs to use as a basis for estimating the costs for developing management systems and programs. 

Estimate the cost of nonbonded HH repulsion as < function of distance by plotting energy (vertical axis) vs HH separation (horizontal axis) for methane+metham (two methanes approaching each other with CH bond head on ). Next, measure the distance between the nearest hychogens in eclipsed ethane. What is the HI repulsion energy in the methane chmer at this distance Multiplied by three, does this approximate the rotatioi barrier in ethane ... 

All of these points contribute to a better process economy than the classical process offers. UOP estimates the cost of a plant (50,000 t/a LAB capacity) with Pacol plant, DeH-9 as catalyst, DeFine- and Detal step at around 45 million. Compared to the first plants with similiar capacities of the early 1980s, in which... 

For example, Scitovsky et al. (1990) estimated the costs of treating individuals with AIDS in the first 12 months following diagnosis to be between US 34,450 and US 36,900 per person-year. Seage et al. (1990) indicated an estimate of US 55,800 per person-year between March 1984 and Febrnary 1986, while Andrulis et al. (1992) estimated US 30,000 per person-year. 

Rice DP (1967) Estimating the Cost-of-Illness, Am J Public Health Nations Health 57 424 440 Rice DP, Cooper BS (1967) The economic value of human Ufe, Am J Public Health Nations Health 57 1954-1966... 

Cost Factors) Define a cost-accounting model that includes consumables, labor, write-off, workload, and frequency of recalibration to estimate the cost per result. 

Cost-utility analysis is similar to cost-efFectiveness analysis in approach, but uses utility as the outcome measure. The utility value is a measure that combines preferences for and values of the overall effect of an intervention on survival, physical and mental health, and social function. Utility is combined with estimates of length of life to provide an assessment of quality-adjusted life years (QALYs). As in cost-efFectiveness analysis, incremental cost-utility ratios are calculated to estimate the cost of producing one extra QALY. 

Poliak (1998) has estimated the cost of R D for the pharmaceutical industry to be about 16 % of the expenditure for new drugs. For intermediates this percentage is certainly lower but still significant. 

The purchased cost of a shell and tube heat exchanger, carbon shell, stainless steel tubes, heat transfer area 500 m2, was 7600 in January 1998 estimate the cost in January 2006. Use the Process Engineering plant index. 

To make a more accurate estimate, the cost factors that are compounded into the Lang factor are considered individually. The direct-cost items that are incurred in the construction of a plant, in addition to the cost of equipment are ... 

Pikulik and Diaz (1977) give a method of costing major equipment items from cost data on the basic components shells, heads, nozzles, and internal fittings. Purohit (1983) gives a detailed procedure for estimating the cost of heat exchangers. 

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. 

A reactor vessel cost 365,000 in June 1998, estimate the cost in mid-2004. 

Using the data on equipment costs given in this chapter, estimate the cost of the following equipment ... 

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