Manufacturing costs, calculation

The bottom-up performance and cost model described herein provides the precise mass and volume of all required battery components necessary to meet the user-specified performance. The calculated materials requirements are then directly linked to manufacturing cost calculation that determines both the materials costs and the costs associated with the manufacturing process and overhead. T.inking performance and cost allows for a complete evaluation of the relationships that govern the cost and energy density of the batteries for HEVs, PHEVs, and EVs. 

The manufacturing cost consists of direct, indirect, distribution, and fixed costs. Direct costs are raw materials, operating labor, production supervision, utihties, suppHes, repair, and maintenance. Typical indirect costs include payroll overhead, quaHty control, storage, royalties, and plant overhead, eg, safety, protection, personnel, services, yard, waste, environmental control, and other plant categories. However, environmental control costs are frequendy set up as a separate account and calculated direcdy. The principal distribution costs are packaging and shipping. Fixed costs, which are insensitive to production level, include depreciation, property taxes, rents, insurance, and, in some cases, interest expense. 

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. 

Published data and shortcut estimating methods can be used to calculate the approximate manufacturing cost of a new product. However, most companies have extensive data on various items of cost such as overheads, property taxes, etc. These data should be used whenever possible to give the estimate that is most vahd for a particular company. 

The current cost per unit for each utility is usually well known in a company. Thus, the annual cost for utilities and the utilities cost per unit of production can be estimated. The latter is normally much smaller than the raw-materials and labor costs. However, a great deal more work is involved in calculating the utilities cost than for any other item in the manufacturing cost. 

Use the information given in Table 2.1 (Prices of Materials) and in Table 2.4 (Energy Content of Materials) to calculate the approximate cost of (a) aluminium, (b) low-density polyethylene, (c) mild steel and (d) cement in 2004, assuming that oil increases in price by a factor of 1.6 and that labour and other manufacturing costs increase by a factor of 1.3 between 1994 and 2004. 

A price calculation is relatively easy for a product with a track record of a regular industrial-scale production. On the other hand, it is difficult, if only a laboratory procedure exists and a calculation has to be made based on the virtual scaleup to industrial-scale production. The ability to perform this desk exercise in a quick and reliable fashion is an important competence criterion of a fine-chemical manufacturer. When setting a price, a separation of tasks must be made between the controller, who calculates the manufacturing cost, and the sales manager, who determines the sales price. If mistakes have been made and prices have to be changed, you will need facts to support your request. If a pivotal product is supplied, a supply contract is concluded. 

Calculation of landed costs at the demand locations is a particularly important analysis. Traditional analyses often focus on comparing unit manufacturing costs. However, the landed costs determine the profitability and competitiveness of a business. Calculating landed costs cannot be achieved... 

Based upon the process flow diagram and the investment costs, the product manufacturing costs or the necessary yield in the micro structured reactor plant to reach an overall profit of, for example at least 20%, will be calculated. 

Another technique that Ernst et al.5 utilized was to reduce the temperature of the fermentor to 15°C during the induction phase. This reduced the inclusion body formation, and achieved soluble heparinase I at a level of 4.1 mg/g dry cell weight. Their calculations indicated that the manufacturing cost in this case would be 653,000 per kilogram. This is only 16% higher than the cost obtained for the insoluble heparinase I expression method. 

The cost of laboratory tests for control of operations and for product-quality control is covered in this manufacturing cost. This expense is generally calculated by estimating the employee-hours involved and multiplying this by the appropriate rate. For quick estimates, this cost may be taken as 10 to 20 percent of the operating labor. 

Now the second part of the exercise the model lets you find out how sensitive the value of the project is to your assumptions. Unless your assumptions are terribly bad, the results can be very useful in deciding on alternative development paths. Factors that are usually considered in the sensitivity analysis are the effects of development time, sales volume, product manufacturing cost and development cost. Calculating their effect may seem a lot of work, but the spreadsheet gives results quickly. 

Figure 16-12 shows the four sensitivities that are usually calculated the effects of changes in development time, sales volume, manufacturing cost and development cost. Experience shows that changes are usually more or less linear in these variables, and that the estimation of changes is more reliable than that of the value of the project. 

Raw Materials The cost of raw materials is normally the largest item of expense in the manufacturing cost of a product. The quantities of raw materials consumed can be calculated from material balances. 

The percentage markup on cost is calculated for a known capital-turnover ratio and a desired rate of return on capital. As with absorption pricing, the percentage markup on manufacturing cost per unit of production is calculated for a normal annual production rate. If this production rate is exceeded, the rate of return on capital will be higher than projected because of the decrease in unit cost. Conversely, if the... 

Project evaluation enables the technical and economic feasibility of a chemical process to be assessed using preliminary process design and economic evaluations. Once a process flowsheet is available, these evaluations can be classified into several steps material balance calculations, equipment sizing, equipment cost determination, utilities requirements, investment cost estimation, sales volume forecasting, manufacturing cost estimation, and finally profitability and sensitivity analysis. 

Battery price is calculated on the basis of the material and manufacturing costs. The cost of the active materials is directly related to their availability. With the exception of Na-S, Fe-air, and a few other exploratory systems, all EV battery candidates are based on materials whch are either not too abundant worldwide, reside in diluted ores, or can be extracted viably only from ores located geographically in a few areas. The Imports may be subject to politically Induced shortages or stoppages, in analogy to the gasoline situation. In some cases, even the domestic resource utilization may become prohibitive because of the environmental impact. 

Profit calculated from the optimal policy was 26.5 million per year indicating that various grade methanols made from the three biomass feedstocks can be competitive with those made from conventional sources. The calculation was based on the unit manufacturing cost determined from a 26,200 X 10 /day methanol plant capacity (plant capacity III in Table IV). The study, however, disclosed the fact that the biomass feedstock costs are the dominating factor in the economics of methanol production. It would therefore be interesting to note how the optimum profits vary with feedstock cost. 

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