Objective operating costs

This brings us to what the real objectives behind P2 are about. Pollution prevention is a carefully plarmed investment aimed at reducing an enterprise s operating costs through the elimination of harmful pollution. A successful P2 activity is a win-win type of investment — that is, the company not only eliminates pollution at the source, but does so on the condition that, at the very least, the activity pays for itself and, more favorably, provides attractive financial returns. The re-engineering considered for the pollution reduction and/or elimination must meet a set of well-defined financial goals within the enterprise otherwise it is not a worthwhile P2 practice. 

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. 

The objective of this case study is to use heat integration via the pinch diagram to reduce this operating cost. A value of Ar" " = 10 K. 

The objective of this case study is to synthesize a CHARMEN which has a minimum operating cost (cost of MSAs + cost of cooling utilities). 

The objective function is to minimize the operating cost of the MSAs and the cooling utilities, i.e.,... 

The operating cost includes items like fuel and other consumables. Maintenance costs are obviously repairs and periodic reworking of the structure. After the passage of years, nearly the entire aircraft structure has often been replaced part by parti The final category is the salvage value. What is the object worth at the end of its life Consider an aluminum airplane for which some scrap value exists at the end of its useful life. When the structure is no longer suitable to be flown, and there we... 

Except for the combination of quality loss and operating costs given by Eq. (23), in the previous sections we assumed the system performance to be determined by a single objective. However, in the analysis of pieces of equipment or plant segments of nontrivial size/ complexity, a multitude of objectives has usually to be taken into account in order to evaluate the system s global performance, and find ways to improve it. 

The objective function for the literature example is the maximization of profit, which is defined as the difference between revenue and operating cost. The operating cost consists of consumed external utility costs. 

Chapter 3 treats the most common type of objective function, the cost or revenue function. Historically, the majority of optimization applications have involved trade-offs between capital costs and operating costs. The nature of the trade-off depends on a number of assumptions such as the desired rate of return on investment, service life, depreciation method, and so on. While an objective function based on net present value is preferred for the purposes of optimization, discounted cash flow based on spreadsheet analysis can be employed as well. 

This chapter includes a discussion of how to formulate objective functions involved in economic analysis, an explanation of the important concept of the time value of money, and an examination of the various ways of carrying out a profitability analysis. In Appendix B we cover, in more detail, ways of estimating the capital and operating costs in the process industries, components that are included in the objective function. For examples of objective functions other than economic ones, refer to the applications of optimization in Chapters 11 to 16. 

To introduce the involvement of these two types of costs in an objective function, we consider three simple examples The first involves only operating costs and income, the second involves only capital costs, and the third involves both. 

Next we consider an example in which both operating costs and capital costs are included in the objective function. The solution of this example requires that the two types of costs be put on some common basis, namely, dollars per year. 

Formulate an objective function to maximize the savings in operating cost, savings expressed as the difference between the value of the heat conserved less the annualized cost of the insulation. 

Appendix B explains ways of estimating the capital and operating costs, leading to the coefficients in economic objective functions. 

So far we have explained how to estimate capital and operating costs. In Example 3.3, we formulated an objective function for economic evaluation and discovered that although the revenues and operating costs occur in the future, most capital costs are incurred at the beginning of a project. How can these two classes of costs be evaluated fairly The economic analysis of projects that incur income and expense over time should include the concept of the time value of money. This concept means that a unit of money (dollar, yen, euro, etc.) on hand now is worth more than the same unit of money in the future. Why Because 1000 invested today can earn additional dollars in other words, the value of 1000 received in the future will be less than the present value of 1000. 

Finally, the objective function to be minimized with respect to Th, the working fluid temperature, is the sum of the operating cost and surface area costs ... 

The system shown in Figure El 1.4 may be modeled as linear constraints and combined with a linear objective function. The objective is to minimize the operating cost of the system by choice of steam flow rates and power generated or purchased, subject to the demands and restrictions on the system. The following objective function is the cost to operate the system per hour, namely, the sum of steam produced HPS, purchased power required PP, and excess power EP ... 

Objective function. Next we develop expressions for the income and operating costs. The operating profit/is given by... 

With respect to the objective function for a filter, the total annual cost of filtration / is assumed to be the sum of the annualized capital costs fc and the annual operating costs/0. The annualized capital cost is related to the cross-sectional area of the filter by the relation... 

Objective function. The objective function for the reactor optimization is based on the difference between the value of the product gas (heating value and ammonia value) and the value of the feed gas (as a source of heat only) less the amortization of reactor capital costs. Other operating costs are omitted. As shown in Murase et al., the final consolidation of the objective function terms (corrected here) is... 

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