Factored estimates Labor, productivity

The detailed-t eoff method can rarely if ever be used. When detailed drawings are available, costs may be estimated by pricing materials and components from suppliers catalogs or, for special items, from quotations. Handbooks are available which give typical values of the labor-hours required to perform units of installation work, such as installation of switches, starters, motors, conduit wiring, and push buttons of various sizes, for both hazardous and nonhaz-ardous areas. Labor rates can be obtained from various government statistical sources or elsewhere. For the United States the National Electrical Contractors Association publishes an excellent manual of electrical costs. From the complete plans and specifications, the estimator can take off materials, estimate the labor cost, apply appropriate factors for labor efficiency, productivity, and local conditions, and achieve good results. 

Among the information about the JPDR dismantling work, labor hours expended in doing dismantling work are useful so that it will be applicable to evaluated unit factors and productivity loss factors in estimating labor hours. 

Produced from a.tura.1 Ga.s, Cost assessments of methanol produced from natural gas have been performed (13—18). Projections depend on such factors as the estimated costs of the methanol production faciUty, the value of the feedstock, and operating, maintenance, and shipping costs. Estimates vary for each of these factors. Costs also depend on the value of oil. Oil price not only affects the value of natural gas, it also affects the costs of plant components, labor, and shipping. 

Factor Methods. A more detailed product cost estimation method is to relate manufacturing cost items to a few calculated items, such as raw materials, labor, and utihties by means of simple factors (1,2). Internal accounting groups often develop factors to use with this method. This factor method is very popular. 

Direct labor costs can be estimated usiag the flow sheet, typical labor needs (persons /shift) for each piece of process equipment, and the local labor rate. Company files are the best source for labor needs and rates, although some Hterature data are available (1,2). The hourly cost of labor ia the United States can be estimated from the M.onthly l bor Review of the Bureau of Labor Statistics. Production supervision costs can usually be taken as a factor, such as 15% of the direct labor cost. 

Overseas Construction Costs Although Table 9-55 gives location factors for the construction of chemical plants of similar function in various countries at 1993 values, these may vaiy differentially over a period of time owing to local changes in labor costs and productivity. Hence, it is often necessaiy to estimate the various components of overseas construction costs separately. Equipment and material prices will depend on local labor costs and the availability of raw materials. If the basic materials have to be imported, costs in the source area become important and import duties and freight charges must be added. 

The overall purification yield of recombinant enzyme is affected by the scale-up and may vary from plant to plant. The profitability at lower yields and at a constant selling price was also determined. A 10% reduction in yield resulted in a 12.9% decrease in the ROI. Conversely, the effect of increasing the plant capacity between 4545 (base case) and 45,450 kg of corn per batch on rGUS production, capital investment, UPC and ROI was estimated. A five-fold increase in capacity resulted in a reduction of 30% in the UPC, and an increase in the ROI from 52 to 91%. Further increase in the capacity did not have a significant effect on the UPC and ROI. With a five-fold increase in the capacity the total capital investment increased by a factor of 3.3, labor, administrative, and overhead expenses doubled, and the rest of the operating costs increased proportionally with the capacity. 

Another important factor that has an influence on the process and consequently on the economics is the expression level of rGUS. Generally, it is in the range of 0.015 to 0.15% of corn dry solids. This estimate is pretty realistic, because an expression level of 0.015% of rGUS has been achieved by ProdiGene, Inc. UPC costs can be decreased dramatically if one is able to increase the expression levels from the current 0.015%. At an expression level of 0.08% (five-fold increase) the UPC decreased by 75%, from 43,000 to 12,000 per kilogram. The ROI increased by about 28% for every 0.01% increase in the expression level. By increasing the expression level by five-fold the same level of production can be achieved with lesser amounts of raw materials. TCI, UPC, labor, administrative, and overhead costs drop by 50, 48, 20 and 50-80%, respectively. The ROI almost doubles. 

There are several cost factors to consider when establishing an assembly line the initial capital investment for the machine(s) depreciation and lifetime (obsolescence) of that equipment operational costs such as labor rates, electricity, water, or the use of inert atmospheres and maintenance support costs. Many of these cost factors are determined on a per product unit basis so that an estimate of potential production volumes is often required for their calculations. Many OEMs and CMS providers have had to estabUsh their own cost models to take into account labor rates, energy costs, shipping costs, and tax structures that are specific to the assembly plant location—on-shore as well as overseas. Because of the cost variables just mentioned, it is difficult to establish a universal model for these calculations. 

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