Factorial costing technique

The basis of the Factorial Methods is to use quotes or estimates of the delivered costs of the MPls and to multiply these up by so-called installation to obtain a total installed cost [40, 41]. 

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The ratio method provides an estimate of AS1 2.9 million. This can be regarded as reasonably accurate ( 30%) considering the original plant cost data is 7 years old. The factorial method has produced a surprisingly similar result. This is probably due to the fact that the plant is not particularly large, and the possibility of estimation cost inaccuracies is reduced. The estimate of AS1 3.5 million determined by the factorial cost technique should therefore also be regarded as an acceptably accurate value. 

The economic evaluation is an important and integral part of the overall feasibility study of the project. First, a capital cost estimate is obtained using two estimation techniques. The ratio method and factorial cost estimation techniques are used to determine separate capital cost estimates for the proposed 280 tonne/day plant. Finally an investigation into the expected return on investment from this project is performed. 

It is not proposed here to provide instruction in the techniques of standard costing but merely to illustrate the uses to which certain of the methods can be put. This can best be shown by the use of a worked example. The following is the statement for a service department supplying a factory, which uses both fuel and materials. 

Modularity. Economic competitiveness requires that the construction time be shortened dramatically. Modular construction techniques arc a key contiibntoi to achieving this goal and are a proven approach to cost control in major construction projects. Modularization provides for a larger percentage of factory construction, rather than field construction. New innovative concepts will rely heavily on modularization and will be centered around lower unit power outputs, factory assembly, and transportation of modules to the plant site. The overall plant size target is 600 MWe net electrical output. 

All of these external resources have relied heavily on the university as a primary source. An unfortunate consequence of these activities over the past decade has been a depletion of the academic resources that have accumulated over the past 50 years. Furthermore, the availability of useful quantities from current academic research has become less likely as modern chemical techniques and instrumentation permit studies with only a few milligrams. This is especially apparent in the natural product field, as the unique diversity inherent in that group has placed such acquisition at a premium. Market demands, nevertheless, persist and have led to the emergence of synthesis factories that prepare compounds specifically for the screening market, using conventional chemical techniques. Output has been greatly enhanced at some of these centers by adoption of modular approaches in synthesis. These sources have helped to fill the void in numbers, but have done little to enhance the level of structural diversity or the cost factor. 

Biotechnology has had a significant effect on the flavour industry but two factors have limited its application to fragrance. The first is cost, as biotechnological processes are usually quite expensive. The second is selectivity. Individual enzymic reactions are very selective, but biochemical redox reactions require expensive co-factors and so the usual technique is to run whole cell fermentations so as to allow the cell s chemical factory to recycle the co-factors. However, the cell does much chemistry in addition to the reaction we wish it to do and the result is a horrendous effluent problem. In flavours, the problem is often simpler as the whole cell, e.g. a yeast cell, can be used as the product. 

Using powdered factory scraps in EPDM compounds, it was found that the cost-effectiveness of this operation depends upon the method of grinding the waste rubber. Also, the size and topography of the particles depend upon the grinding technique, and these characteristics play a vital role in controlling the composite properties [27]. 

The simple and nondestructive Barcol hardness test has the added advantage that it can be conducted in situ on the factory floor (see Section 6). The other techniques are more costly, require a greater degree of operator training, and are not practical for in situ factory use. However, they are suitable for checking incoming material as preimpregnates or laminates. 

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