Operating cost location adjustments

Every location has advantages and disadvantages that impact on the operating costs. Data must be collected for the proposed site and used to adjust historical data to get a proper estimate. Such costs as transportation, labor, and purchased utilities can be determined. However, such items as operating labor productivity, local customs, weather, and local management attitudes can only be estimated. 

In general, production rate variation is one of the most important load disturbances in plantwide control and operation, and it can be measured, which is more important. Here we are interested in whether significant energy savings can be obtained by adjusting the feed tray locations as the production rate changes. If the operating cost can be appreciably reduced by... 

In instances where test bores have been completed, it may sometimes be possible to predict the general locations of productive fractures. When these are encountered by surprise, however, the appropriate adjustments in the drilling strategy must be implemented rapidly, slowing the progress of the drilling operation and increasing the costs. 

Since global specialty chemicals companies already operate sites in most relevant countries, average personnel costs per full-time employee can be established relatively easily. However, location-specific adjustments of the number of operators required to run a production line/plant are required. Firstly, different degrees of automation are usually deployed in developed and developing countries. This aspect is to some extent included in the plant type definition via personnel requirements that depend on the degree of automation. However, even for technically identical plants the number of operators required per shift usually differs between developed and less developed countries due to different levels of personnel productivity. Secondly, annual working hours and consequently the relationship between... 

The best source of information for use in total-product-cost estimates is data from similar or identical projects. Most companies have extensive records of their operations, so that quick, reliable estimates of manufacturing costs and general expenses can be obtained from existing records. Adjustments for increased costs as a result of inflation must be made, and differences in plant site and geographical location must be considered. 

---