Manufacturing-cost estimation standard costs

Cost of business interruption. The cost of business interruption is significantly influenced by various commercial factors. For example, if you are not producing at fiill capacity it may be possible to make up lost production at other facilities or when the plant comes back into operation. The business interruption costs will only be the additional costs of production, transportation and any lost sales. As these conditions can vary from month to month it may be more appropriate to adopt a standard method of calculating business interruption costs for PSM and ESH purposes. One commonly adopted approach is to estimate the tonnage of production lost and calculate the cost as being the difference between the sale price and all manufacturing, storage and transportation costs. 

When the attractiveness of new products is evaluated, either for submitting an offer or for inclusion in the R D program, manufacturing costs have to be estimated on the basis of a laboratory synthesis procedure. This is best done by breaking down the process into unit operations, the standard costs of which have been determined previously. Care has to be taken to estimate the time required for each step of a process. Thus a liquid-liquid extraction can take more time than the chemical reaction. The capability of a fine-chemical company to make dependable manufacturing cost forecasts is a distinct competitive advantage. 

One of the major costs involved in any chemical process is for the equipment. In many cases, standard types of tanks, reactors, or other equipment are used, and a substantial reduction in cost can be made by employing idle equipment or by purchasing second-hand equipment. If new equipment must be bought, several independent quotations should be obtained from different manufacturers. When the specifications are given to the manufacturers, the chances for a low cost estimate are increased if the engineer does not place overly strict limitations on the design. 

Cost estimates for each system at each of the four production levels are the sum of materials, manufacturing, and assembly costs, as well as a manufacturer s markup and a 10% cost contingency (as is standard automotive cost estimation practice). As might be expected, cost of the finished system decreases with increasing production volume. 

Evaporator Costs. With so much variation in evaporator construction, materials, and accessories, manufacturers are reluctant to give standard cost figures. The most reliable method seems to be to estimate the unit cost as cylindrical shells, plates, heads, tubes, fittings, etc., based on the weight of material and the unit material and labor costs. This is the method generally used by fabricators. A published set of cost curves for preconstruction cost estimating is given in Fig. 6-12. 

This first example applies to UK industry in general. The turnover for UK manufacturing industry was in the order of 150 billion in 1990 (Smith, 1990). If the total quality cost for a business was likely to be somewhere in the region of 20%, with failure costs at approximately 50% of the total, it is likely that about 15 billion was wasted in defects and failures. A 10% improvement in failure costs would have released an estimated 1.5 billion into the economy. IBM, the computer manufacturer, estimated that they were losing about 5.6 billion in 1986 owing to costs of non-conformance and its failure to meet quality standards set for its products and... 

In April of 1998, the EPA published a final rule for emission of oxides of nitrogen (NOx), hydrocarbons (EIC), carbon monoxide (CO), particulate matter (PM), and smoke opacity for newly manufactured and rcmanufacturcd locomotives. The rulemaking took effect in 2000 and is estimated by the EPA to cost the railroads 80 million per year—about 163 per ton of NOx reduced, according to EPA figures. The emissions standards for the several pollutants will be implemented in three tiers—for locomotives... 

As described in Chap. 1 of this book, the world production using sulfur is estimated at 150 million tonnes per year. The allowed emission of sulfur dioxide in the stack based on Environment Protection Agency (EPA) of USA standards, acid rain of about one million tonnes takes place every year. If future sulfuric acid plants are built using the cold process described here, not only will the cost of manufacture be reduced but also more cogeneration of steam as well as zero acid rain can be achieved. 

The starting material for polyCphenylene oxide) is 2,6-dimethylphe-nol (2,6-DMP also referred as 2,6-xylenol), which can be obtained by methylation of phenol with methanol, or isolated from coal tars followed by extraction and distillation. The latter process is rarely used nowadays due to the high cost of separation. Currently, only vapor-phase methylation were used for manufacture of o-cresol/2,6-DMP. The alkylation reaction is exothermic, and standard enthalpy change was estimated to be -104kJ/mol for the first methylation (o-cre-sol) and -48kJ/mol for the second methylation (2,6-DMP) as shown... 

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