Incremental costs

Optimum Pressure Drop. For most heat exchangers there is an optimum pressure drop. This results from the balance of capital costs against the pumping (or compression) costs. A common prejudice is that the power costs are trivial compared to the capital costs. The total cost curve is fairly flat within 50% of the optimum (see Fig. lb), but the incremental costs of power are roughly one third of those for capital on an aimualized basis. This simple relationship can be extremely useful in quick design checks. 

Optimal economic insulation thickness may be determined Iw various methods. Two of these are the minimum-total-cost method and the incremental-cost method (or marginal-cost method). The minimum-total-cost method involves the actual calculations of lost energy and insulation costs for each insulation thickness. The thickness producing the lowest total cost is the optimal economic solution. The optimum thickness is determined to be the point where the last dollar invested in insulation results in exactly 1 in energy-cost savings ( ETI— Economic Thickness for Industrial Insulation, Conservation Pap. 46, Federal Energy Administration, August 1976). The incremental-cost method provides a simplified and direcl solution for the least-cost thickness. 

Economics Power-recoveiy units have no operating costs in essence, the energy is available free. Furthermore, there is no incremental capital cost for energy supply. Incremental installed energy-system costs for a steam-turbine driver and supply system amount to about 800 per kilowatt, and the incremental cost of an electric-motor driver plus supply system is about 80 per kilowatt. By contrast, even the highest-inlet-pressure, largest-flow power-recoveiy machines will seldom have an equipment cost of more than 140 per kilowatt, and costs frequently are as low as 64 per kilowatt. However, at bare driver costs (not including power supply) of 64 to 140 per kilowatt for the power-recovery driver versus about 30 to 80 per Idlowatt for... 

No commercial instruments specifically for UPS usually an add-on to XPS (incremental cost " 30,000) or done using a synchrotron facility as the photon source... 

The factory-produced, dedicated NGV is the ultimate goal of the NGV industry because it will reduce the incremental cost of the vehicle, the fuel system will be belter integrated into the vehicle, and the vehicle performance can be optimized for natural gas. A dedicated NGV s emissions, power, and driveability can be superior to a comparable gasoline vehicle. There is however, a reluctance by some automobile manufacturers to produce dedicated NGVs until the refueling infrastructure is more fully developed. 

The efficient heat pump reduces energy use by 1,676 kWh per year on average. Is the efficient model heat pump a good investment Suppose the incremental cost of the efficient unit, as compared with the less efficient unit, is 1,000, and electricity cost 10 cents per kWh. With this price of electricity, the efficient heat pump reduces electricity costs by 167.60 per year. Taking a simplified approach for purposes of illustration and assuming that each unit lasts indefinitely and has no repair, maintenance, or replacement costs, and ignoring possible tax effects, the internal rate of return may be calculated as 1,000= 167.60/r, which is 16.76 percent per year. If the household can borrow money at, say, 10 percent per year and earn 16.76 percent, the investment makes economic sense. If we assume a 10 percent discount rate, the present value of the investment is 1,676, which exceeds the initial investment cost. The net present value is 676, which indicates that the investment is feasible. 

In the past, electric utilities dispatched generating units to meet demand on a lowest-to-highest cost basis. This form of dispatch is commonly referred to as economic dispatch. The marginal or incremental cost of dispatching units is traditionally the benchmark used to rank order available generators. These marginal costs, m the very short run, are typically... 

Most of the vibration-based predictive maintenance systems include the capability of recording visual observations as part of the routine data acquisition process. Since the incremental costs of these visual observations are small, this technique should be incorporated in all predictive maintenance programs. 

This baseline should include the incremental cost for production created by catastrophic machine failures and other parameters. If they are available or can be obtained, they will help greatly in establishing a valid baseline. 

Beck et al. (2004) presented an analysis of the cost-effectiveness of highly active antiretroviral therapy in Canada. They compared the cost-effectiveness from 1991 to 1995 (pre-HAART period) with the period from 1997 to 2001 (HAART period) for non-Aids and Aids groups. For the first group, they calculate total cost of US 4265 in the pre-HAART period and US 9445 in the HAART-period, whereas 66% and 84% were spent on antiretrovirals. The incremental cost per life year gained was US 14,587, that is, the HAART technology is rather cost-effective. For the Aids patients, the total costs were US 9,099 in the pre-HAART period and US 11,764 in the HAART period, whereas 29% were for antiretrovirals in the pre-HAART era and 72% in the HAART era. The incremental cost per life year gained by introducing HAART was US 12,813, so that HAART seems cost-effective in Canada. 

If the two options have different costs and effects, what is the incremental cost-effectiveness ratio ... 

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. 

There are several measure sets with immediate payback SE, SF, SH, SI. Measures SE and SF are radiant panel systems with displacement ventilation. These systems have a similar cost to the base case, but they offer energy savings. Furthermore, significant sizing reductions, mainly in the cooling tower and chiller sizes, offset the incremental cost of the envelope and heat recovery measures. Because the elevator efficiency measures offer a net savings in capital cost, the capital cost of the other measures is further offset. 

Measures SH and SI are hydronic water loop systems with water-to-air heat pumps. These systems also offer energy savings over the base case, but have an incremental cost over the base case. Other than the system type, these measures are the same as SE and SF, so either payback period is immediate for similar reasons. 

Rule 2 Calculate the incremental cost-benefit ratios. 

Arrange the programmes in order of effectiveness and calculate the incremental cost-benefit ratios (Table 8.1). 

Table 8.3 Ordering of programmes according to incremental cost-benefit ratios...

Budget = 500 -> F + K + B. This case shows that the rale does not always mean choosing the project with the lowest incremental cost-benefit ratio out of the mutually exclusive projects. If we have a budget of 500 we should in theory choose A + F + K, but then there would be 100 left over. With the extra 100 we can implement B instead of A, since it produces more benefits. 

The work by Cabiedes, Arcos and Alvarez de Toledo61 makes a novel contribution, evaluating the incremental cost of a broader pharmaceutical care service than the mere distribution of dmgs in pharmacies. The authors define this broader service as pharmaceutical intervention , understanding this as the activity that is oriented towards preventing, detecting and if necessary solving problems related to pharmaceuticals. 

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