Total annual cost

The total annualized cost at the optimal setting of the capital/energy tradeoff is... 

The preceding definitions of economic potential and total annual cost can be simplified if it is accepted that they will be used to compare the relative merits of difierent structural options in the flowsheet and difierent settings of the operating parameters. Thus items which will be common to the options being compared can be neglected. 

Each year, Americans report over three million fires leading to 29,000 injuries and 4,500 deaths (1). The direct property losses exceed 8 biUion (1) and the total annual cost to our society has been estimated at over 100 biUion (2). Personal losses occur mosdy in residences where furniture, wall coverings, and clothes are frequently the fuel. Large financial losses occur in commercial stmctures such as office buildings and warehouses. Fires also occur in airplanes, buses, and trains. 

The revenue from the annual sales of product As, minus the total annual cost or expense required to produce and sell the product Af , excluding any annual provision for plant depreciation, is the annual cash income Ac( ... 

The estimated (DCFRR) and the estimated (NPV) are both functions of the estimated cumulative revenue from annual sales X As, the estimated cumulative total annual cost or expense X Ate, and the estimated fixed capital cost Cfc of the plant. The revenue from annual sales for each year is in turn the product of the sales price and sales volume. Initially it is desirable to select those values from the distribution cui ves of X As, X Ate, and Cfc which enable the maximum and minimum (DCFRR) and (NPV) to be calculated. 

Optimization of the liquid-to-gas ratio in terms of total annual costs often suggests that the molar fiquid-to-gas ratio Lm/G should be about 1.2 to 1.5 times the theoretical minimum corresponding to equilibrium at the rich end of the tower (infinite height), provided flooding is not a problem. This would be an alternative to assuming that L /G>i, — mlO.7, for example. 

The annualized capital cost (ACC) is the product of the CRF and TCC and represents the total instaUed equipment cost distributed over the lifetime of the project. The ACC reflects the cost associated with the initial capital outlay over the depreciable life of the system. Although investment and operating costs can be accounted for in other ways such as present-worth analysis, the capital recovery method is preferred because of its simplicity and versatUity. This is especiaUy true when comparing somewhat similar systems having different depreciable lives. In such decisions, there are usuaUy other considerations besides economic, but if all other factors are equal, the alternative with the lowest total annualized cost should be the most viable. 

Fig. 22-4 Total repair costs (1) and (2) for wall penetrations (1) and (2) in Fig. 22-3 and comparison with total annual cost of cathodic protection at 400 DM km (3), at 3000 DM km (4), and with subsequent installation (400 DM km ) after...

Appendix III provides an overview of process economics. Two principal categories of expenditure are particularly important fixed and operating costs. The fixed cost ( ) can be distributed over the service life of the equipment as an annualized fixed cost ( /yr). The total annualized cost (TAC) of the system is given by... 

Optimizing the use of flie external MSA The pinch diagram (Fig. 3.12) demonstrates that below the pinch, the load of the waste stream has to be removed by the external MSA, S3. This renders the remainder of this example identical to Example 2.2. ThereftKc, the optimal flowrate of S3 is 0.0234 kg mol/s and the optimal outlet composition of S3 is 0.(X)85. Furthermore, the minimum total annualized cost of the benzene recovery system is 41,560/yr (see Fig. 2.13). 

As discussed in Section 2.5, the minimum allowable composition differences can be used to trade off fixed versus operating costs. TVpically, an increase in j leads to an increase in the MOC of the network (see Figs. 3.12 and 3.14) and a decrease in the fixed cost of the system. Hence, the minimum allowable composition differences can be iteratively varied until the total annualized cost of the system is attained (see Fig. 2.13). 

It is desired to synthesizes an optimum MEN that features minimum total annualized cost, TAC , where... 

In the previous problem, it is desired to compare the total annualized cost of the benzene-recovery system to the value of recovered benzene. The total annualized cost TAC for the network is defined as ... 

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. 

This is only 31 % of the operating cost prior to heal integration. Once the minimum operating cost is determined, a network of heat exchangers can be synthesized. The trade-off between capital and operating costs can be established by iteratively vaiying AT " until the minimum total annualized cost is attained. 

The design procedure starts by identifying the minimum utility cost for a given heat-transfer driving force. Next, the fixed and operating costs are traded off by iterating over the driving forces until the minimum total annualized cost TAC is attained. 

Now that the values of Pp and n have been determined, we can model the system as described by Section 11.2. Wfith the proper cost functions, die total annualized cost TAC of the system can be evaluated for this iteration. Next, a new value of Cp is selected and steps 2-10 are repeated. The TAC of the system can be plotted vs. Cp (or any of the 10 other variables) to determine the minimum TAC of the system. 

Estimate the total annualized cost of the system and the cost per of permeate. 

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 ... 

Total annualized cost = Annualized fixed cost... 

The total annual cost (TAG) of a process plant comprises two factors viz. the capital costs of installed plant items and the operating cost of running them... 

The total annual cost of a pipeline consists of a capital charge plus the running costs. The chief element of the running cost will be the power required to overcome the head loss which is given by equation 3,20 ... 

Nevertheless, accidents and unintended chemical releases pose serious financial risks to the chemical and petrochemical industry. In 1984 there were five major accidents in the hydrocarbon-chemical industries, totaling an estimated loss of 268 million. Hundreds of lesser accidents occur yearly. The total annual cost to the industry of accidents and unintended chemical releases is difficult to quantify. It includes significant costs owing to interruption... 

The reactor design calculations of Example 6.2 go here. They produce the total annualized cost, Total, that is the objective function for this optimization... 

Based on their estimates of direct and indirect costs of two clinics in Athens specialized in AIDS treatment, Papaevangelou et al. (1995) estimated total annual costs per case for 1990 as US 20,202. 

This will not necessarily be the optimum design for the network. The optimum design will be that which gives the lowest total annual costs taking into account the capital cost of the system, in addition to the utility and other operating costs. The number of exchangers in the network, and their size, will determine the capital cost. 

Estimate the capital and operating costs, and the total annual cost. 

For any network there will be a best value for the minimum temperature difference that will give the lowest total annual costs. The effect of changes in the specified ATIllin need to be investigated when optimising a heat recovery system. 

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