Fixed operating costs chapter

Here, the objective is to minimize operating cost followed by trading off with fixed cost as discussed in Ou ner IWo. If needed, one can diteclly minimize total annualized cost by adding a fixed-cost term to the objective function. This fixed-cost term is ex(nessed in terms of as described in Chapter TWo. 

Operating costs C include all expenses regarding the manufacturing process, as raw materials, utilities, manpower, contingencies, etc. (see later in this chapter), excluding the depreciation of the fixed-capital. 

All the techniques that have been discussed in this chapter use the fixed capital cost and the operating costs in order to evaluate the profitability of a process. Clearly, the accuracy of such predictions will depend on the accuracy of the estimates for the different costs. When screening alternative processes, it is sometimes useful to evaluate the difference between the revenue from the sale of products and the cost of raw materials. This difference is called the profit margin or sometimes just the margin. 

A certain amount of money must be invested if any product is to be produced. This is referred to as capital. The capital is made up of the fixed capital needed to construct the plant and the working capital needed to operate it. The fixed capital is the cost of building and equipping the plant and all its peripheral buildings and operations. Chapter 9 was devoted to methods for estimating the fixed capital investment. 

For the establishment of the realistic limit, one has to take account of the rates of processes in which mass, heat, momentum, and chemical energy are transferred. In this so-called finite-time, finite-size thermodynamics, it is usually possible to establish optimal conditions for operating the process, namely, with a minimum, but nonzero, entropy generation and loss of work. Such optima seem to be characterized by a universal principle equiparti-tioning of the process s driving forces in time and space. The optima may eventually be shifted by including economic and environmental parameters such as fixed and variable costs and emissions. For this aspect, we refer to Chapter 13. 

Capital investment, as defined earlier, is the total amount of money needed to supply the necessary plant and manufacturing facilities plus the amount of money required as working capital for operation of the facilities. Let us now consider the proportional costs of each major component of fixed-capital investment as outlined previously in Table 1 of this chapter. The cost factors presented here are based on a careful study by Bauman and associates plus additional data and interpretations from other more recent sources with input based on modem industrial experience. 

As discussed earlier in this chapter, drying solutions over Na2S04, MgS04, or molecular sieves is an operation rarely used on scale, with azeotropic drying being preferred. A fixed bed of molecular sieves may be used if the solute is heat-sensitive or if other considerations such as the time and processing costs of a heated distillation preclude drying by azeotropic distillation. 

Ramshaw and his coworkers at ICI defined PI as a reduction in plant size by at least a factor 100. The choice of this factor is arbitrarily, but indicates the aim of a significant reduction in plant size. This reduction would significantly improve the process economics, by reducing fixed and operating capital costs. However, it will also allow implementation of the concept of modular design of chemical processes (see Chapter 1). 

Physical properties and especially the isotherms depend on temperature as well as eluent composition. Feed and eluent composition influence the viscosity and therefore the fluid dynamics. The latter effects have already to be taken into account when selecting the chromatographic system (Chapter 3). The operating temperature for preparative processes is commonly selected in liquid chromatography to be close to room temperature for cost and also stability reasons. Consequently, temperature and eluent composition are early fixed parameters that are often not explicitly considered during subsequent process design. 

The costs associated with the day-to-day operation of a chemical plant must be estimated before the economic feasibility of a proposed process can be assessed. This chapter introduces the inportant factors affecting the manufacturing cost and provides methods to estimate each factor. In order to estimate the manufacturing cost, we need process information provided on the PFD, an estimate of the fixed capital investment, and an estimate of the number of operators required to operate the plant. The fixed capital investment is the same as either the total module cost or the grassroots cost defined in Chapter 7. Manufacturing costs are expressed in units of dollars per unit time, in contrast to the capital costs, which are expressed in dollars. How we treat these two costs, expressed in different units, to judge the economic merit of a process is covered in Chapters 2 and Ifi. 

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