Production costs Maintenance

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. 

Particle Segregation Mechanisms. Segregation is the process by which an assembly of soHd particles separates as it is being handled. This often results in cosdy quaUty control problems due to the waste of raw or finished materials, lost production, increased maintenance, and capital costs required to retrofit existing faciUties. 

The second largest market is that of profiles, particularly for the building industry. UPVC has become well established for guttering, waste piping and conduits, where economies arise not just in basic product costs but also in transportation and installation costs. Unlike with cast iron products, corrosion and maintenance is less of a problem, although UPVC products are more liable... 

The cost of equipment determines the capital investment for a process operation. However, there is no direct relationship to profits. That is, more expensive equipment may mean better quality, more durability and, hence, longer service and maintenance factors. These characteristics can produce higher operating efficiencies, fewer consumption coefficients and operational expenses and, thus, fewer net production costs. The net cost of production characterizes the perfection rate of the total technological process and reflects the influences of design indices. Therefore, it is possible to compare different pieces of equipment when they are used in the manufacture of these same products. 

In addition to the fixed capital investment needed to purchase and install process equipment and auxiliaries, there is a continuous expenditure referred to as operating cost, which is needed to operate the process. The operating cost (or manufacturing cost or production cost) includes raw materials, mass-separating agents, utilities (fuel, electricity, steam, water, refrigerants, air, etc.), catalysts, additives, labor, and maintenance. The total annualized cost of a process is defined as follows ... 

Maintenance costs are a major part of the total operating costs of all manufacturing or production plants. Depending on the specific industry, maintenance costs can represent between 15 and 40 per cent of the costs of goods produced. For example in food related industries, the average maintenance cost represents about 15 per cent of the cost of goods produced while in iron and steel, pulp and paper and other heavy industries maintenance represents up to 40 per cent of the total production costs. 

Until recently, middle and corporate level management have ignored the impact of the maintenance operation on product quality, production costs and more importantly on bottom-line profit. The general opinion has been Maintenance is a necessary evil or Nothing can be done to improve maintenance costs . Perhaps these were true statements ten or twenty years ago. 

Class IV machinery would include other plant equipment that has a proven history of impacting either production or maintenance costs. All equipment in this classification must be evaluated to determine whether routine monitoring is cost-effective. In some cases, replacement costs are lower than the annual costs required to monitor machinery in this classification. 

Fixed costs are those elements of piece cost that are a function of the annual production volume. Fixed costs are called fixed because they typically represent one-time capital investments (buildings, silos, processing machines, etc.) or annual expenses unaffected by the number of products produced (building rent, engineering support, administrative personnel, etc.). Typically, these costs are distributed over the total number of products produced in a given period. For plastics processes the principal elements are main machine cost, auxiliary equipment cost, tooling cost, building cost, overhead labor cost, maintenance cost, and the cost of capital. 

Production costs include capital-dependent costs, e.g. depreciation, interest, insurance, and taxes and operating costs such as costs of raw materials and auxiliaries, costs of utilities, waste-disposal costs, labour costs, maintenance costs, and overheads. 

There can be an element of maintenance that is a fixed and an element that is variable. Fixed maintenance costs cover routine maintenance such as statutory maintenance on safety equipment that must be carried out irrespective of the rate of production. Variable maintenance costs result from certain items of equipment needing more maintenance as the production rate increases. Also, the royalties that cover the cost of purchasing another company s process technology may have different bases. Royalties may be a variable cost, since they can sometimes be paid in proportion to the rate of production or sales revenue. Alternatively, the royalty might be a single-sum payment at the beginning of the project. In this case, the single-sum payment will become part of the project capital investment. As such, it will be included in the annual capital repayment, and this becomes part of the fixed cost. 

Various requirements have to be met for the use of sensors in domestic gas appliances. First of all, the temperature conditions at the probe must be chosen carefully. Secondly cross-sensitivities, accuracy, measuring range, size of the sensor and its response time are to be taken into account, and finally production and maintenance costs have to be low. 

Maintenance cost reduced by energy subsidies (by man) production increased Maintenance cost high, but rarely subsidized... 

Excessive costs of manual labour in production and maintenance of sugar mills. 

As in any other process, so also in the high-pressure polymerization of ethylene, do capital costs, utilities, maintenance, manpower, and costs of raw materials contribute to the production costs of low-density polyethylene (LDPE). The cost structure is typical for the production of bulk chemicals but is strongly influenced by the requirements of a high-pressure process. 

The production costs are dominated by the costs of ethylene, whose ratio is 69.4% for a 100,000 t/a plant (Fig. 8.2-4). Also, depreciation (7.4%), utilities (6.2%), overheads (5.3%), and maintenance (4.5%) contribute much to the costs. Labour costs (2.8%) play a minor role. If a plant is already depreciated, the costs reduce by around 110 DM/t, if the maintenance costs have not increased. 

Among direct production costs, we can list raw materials, utilities, direct operation labour, maintenance, catalysts, royalties, etc. In our case, solvents (THF and pressurised CO2), polymer, and active ingredient are needed on a daily basis. The corresponding quantities were determined using the process simulator, as described in paragraph 8.3.3. In this discussion, additional solvent (THF) losses are supposed to equal 5% of the total flow rate entering the... 

Viability is assessed according to a required maximum 5 year return on investment. All annual costs must be considered. These costs include the required return on the capital outlay, as well as daily production costs, annual sundry charges such as insurance, tax, maintenance charges, and interest on borrowed capital. 

Table E.4 in Appendix E provides a breakdown of the total production costs encountered in the manufacture of nitric acid. The costing is based upon paying the full market price for ammonia feed (at A 300/tonne). All tangible input and output valuesarecalculated using the results of the mass and energy balances detailed in Section 7.3. Labour requirements are evaluated assuming only two operators per shift and the usual labour maintenance requirements for nitric acid plants (see Ref. CE1 1).

A similar solution but deriving from a business environment is offered by SAP, a leader in business software. The business software mySAP permits a transparent and synchronized supply chain with direct access of the production management to yield, personal costs, maintenance, raw material and energy consumption [105],... 

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