Material-Related Costs

Work at our project participants uncovered some significant issues in this area. Not surprisingly, the costs related to acquiring, handling, and 

At our molders, low-volume or special items included pre-colored materials, abrasive compounds, and purchased or consigned components. At the one participant where pre-colored material was an issue, the per-pound material activity cost for pre-colored material was almost triple that for white or black material. We also found that abrasive compounds caused accelerated mold deterioration and higher mold maintenance costs at two of our sites. Finally, purchased components generally required more purchasing and quality control per dollar purchased than compounds and, at one site, the storage and handling of customer-consigned components cost the company close to 30,000 per year. 

All six sites contracted with outside processors to perform some manufacturing process or processes. Three did this extensively, with over 1,000,000 annually in processor costs, and three did so less frequently, with 100,000 to 150,000 annually in cost. When the cost of activities existing to support these outsourced processes were attached to the prices charged by the vendors, they added 3 to 15 percent to the cost at sites making extensive use of outside processors and 20 to 50 percent to the cost at those sites using outside processors less frequently. 

Finally, one company received and stored plastic compounds at a site location a mile from the manufacturing facility and incurred close to 150,000 annually in excess material handling costs. This added 0.03 to the cost of every pound of plastic used, which was a material addition that had been invisible without ABC. 

Four of the participants either sold their products in more than one marketplace or to more than one customer type. One sold to both automotive and nonautomotive related customers. Another sold primarily to the automotive industry but had one major customer whose buying habits varied considerably from all of its other customers. Still another sold to large and small OEMs as well as service divisions of OEMs and independent after-market organizations. The fourth company sold primarily to the aerospace industry but had several offshore customers and one major domestic customer whose buying practices varied considerably from 

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Cost Calculation. The main elements determining production cost are identical for fine chemicals and commodities (see Economic evaluation), a breakdown of production cost is given in Table 2. In multipurpose plants, where different fine chemicals occupying the equipment to different extents are produced during the year, a fair allocation of costs is a more difficult task. The allocation of the product-related costs, such as raw material and utiHties, is relatively easy. It is much more difficult to allocate for capital cost, labor, and maintenance. A simplistic approach is to define a daily rent by dividing the total yearly fixed cost of the plant by the number of production days. But that approach penalizes the simple products using only part of the equipment. 

The mamifac turing cost of a product is the sum of the processing or conversion cost and the cost of raw materials. The processing cost can be roughly broken down into three parts investment-related cost, labor-related cost, and utility cost. 

The cost data used for this example is the same as that given in Table 7.4 from the previous example and the effluent treatment cost was once again 200 c.u. per ton of water. The time horizon for this example is 9 h. The water and raw material relations used in this example were the same as those used in the previous example. 

This type of organization, of course, cannot be developed without cost. Money may be required for personnel time that might otherwise be used for different purposes or even for the hire of professionals or technicians, as well as for the cost of equipment, materials, and additional training. It is important, as the program develops, that these and other related costs be recognized and provided with a specific budget. 

Lastly, cost is a crucial issue in the commercialization of fuel cells, particularly as performance and lifetimes have improved to the threshold of practicability. The major costs associated with these systems are materials-related, with separator and catalyst materials at the top of the list. It is envisioned that the cost of separator materials will decrease with increased production and competition and as alternative materials are perfected. However, the cost of conventional noble metal catalysts, particularly platinum, is expected only to increase with increased production and demand. Therefore, the cost issue could perhaps be addressed by employing alternative catalysts, including biocatalysts. Enzymes are de-... 

Figure 13. Manufacturing cost of ethanol by enzyme hydrolysis. Yearly production 25 million gallons (95%). Includes capital related costs, raw materials ir chemicals, utilities, labor, maintenance. Feed ...

Unit-related costs e.g., raw materials, energy, quantity-proportional production operations such as milling or packaging operations... 

Product-related costs, e.g., costs for holding specific raw materials or using dedicated equipment... 

Chemical economics. The preceding problems must always be approached in relation to economic considerations. One must consider the availability, location, and cost of raw materials. The cost of equipment and its maintenance, labor, power, and so forth, are only a few of the factors that govern the feasibility of the process. The actual location of the plant must be considered in relation to the cost of transportation of raw materials to the plant and of finished products to the market. 

There is no current commercial biologic process for the production of succinic acid. In past laboratory systems, when succinic acid has been produced by fermentation, lime is added to the fermentation medium to neutralize the acid, yielding calcium succinate (2). The calcium succinate salt then precipitates out of the solution. Subsequently, sulfuric acid is added to the salt to produce the free soluble succinic acid and solid calcium sulfate (gypsum). The acid is then purified with several washings over a sorbent to remove impurities. The disposal of the solid waste is both a directly economic and an environmental concern, as is the cost of the raw materials. Some key process-related problems have been identified as follows (1) the separation of dilute product streams and the related costs of recovery, (2) the elimination of the salt waste from the current purification process, and (3) the reduction of inhibition to the product succinic acid on the fermentation itself. Acetic acid is also a byproduct of the fermentation of glucose by Anaerobiospirillium succiniciproducens almost 1 mol of acetate will be produced for every 2 mol of succinate (3). Under certain cultivation conditions by a mutant Escherichia coli, lesser amounts of acetate can be produced (4,5). This byproduct will also need to be separated. 

Stream Factor Changes We assumed that for stream factors of 30%, 50%, and 70%, the raw materials requirement would be reduced proportionately, but capital-related costs do not change from the base case. We calculated the hydrogen price the same way as in the base case. 

Photoelectrochemical Hydrogen Generation from Water Using Solar Energy. Materials-Related Aspects As in Entry 5, a comprehensive review which outlines the principles, R D progress, impact on hydrogen economy, and cost issues. 76... 

In spite of the great promise solid state ionic devices offer, few commercial successes have been reported to date. The major problems faced today in the field of solid state ionic devices are still material related. At present, the key technical challenge is development of reliable and cost-efficient techniques to synthesize solid state ionic materials to serve as solid electrodes and electrolytes. On the other hand, these materials are not used in isolation, but in an electrochemical system and must be in contact with each other. The response of solid state ionic materials in solid state ionic devices is highly... 

Figure 122 shows an estimate of ammonia production costs at various locations. In this figure the capital-related costs are based on a debt/equity ratio of 60/40. With 6 % depreciation of fixed assets and spare material, 8 % interest on debts and 16 % ROI on equity, corresponding to a total of about 16.5 % of the total capital involved. The total capital includes the LSTK price for plant and storage, cost of the off-sites for an industrialized site, in-house project costs, spare parts and catalyst reserves, working capital. 

As confirmation of an inert radical production mechanism, iodine compounds are particularly effective because of the production of I atoms. However, there are big deficiencies in our understanding of the details of anti-knock chemistry. This is illustrated by the large differences in antiknock effectiveness shown in MacKinven s measurements between substances with apparently very similar composition [27]. As shown in Table 7.3, some of the methyl substituted diphenyl oxalates are quite good antiknocks, with up to 1.1 times the molar effectiveness of NMA. But another is pro-knock. The mechanism responsible for this structure/property dependence is not known. More recently, high effectiveness has been reported for ashless materials related to dialkyl amino fulvenes [28-31], but no credible mechanisms have been published. No ashless anti-knocks have proved sufficiently cost-effective to be used commercially. 

Feedstock 0.95/GJ Labor-Related Purchased Materials Fixed Costs... 

Capital Costs. We consider in turn the superconducting materials costs, cryostat-related costs and refrigerator capital costs. 

D. Spare parts (stores) management Getting the right spare part to the right place on time is an important step in effective maintenance materials management. Cost-effective pharmaceutical plants employ proper systems, procedures, and practices relating to the procurement and management of maintenance spare parts. Size of spare parts inventory... 

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