Total Delivered Cost

The earlier section focused on reducing lead time, but an ideal supply chain choice could locate inventories to optimize supply chain costs. 

if the manufacturer could pool demands from many retailers and thus smooth inventories, it may be optimal for inventory to be held at that manufacturer. However, if the manufacturer does not see much demand pooling benefits, possibly due to differing requirements for each retailer, then the retailer may be the pooling location to smooth demands from multiple customers, which will improve supply chain performance. 

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A rough method of estimating the piping factor as a percentage of the total delivered cost of major process equipment (excluding instruments and electrical items) was presented by E. S. SokuUu in the form... 

Ce = the total delivered cost of all the major equipment items storage tanks, reaction vessels, columns, heat exchangers, etc., fi = the Lang factor , which depends on the type of process. 

With all other formulas remaining the same as those that determine compressed gas truck transport costs, the total delivered cost per kilogram is found using the recalculated capital, fuel, and labor costs and dividing those costs by the delivered quantity of hydrogen, accounting for the boil-off. 

A more detailed development of Lang factors, based on an analysis of 156 capital-cost estimates, was published by the editors of Chemical Engineering magazine in the September 30, 1963 issue on pages 120 and 122, as Cost File 81. A further refinement, carried out by Peters and Timmerhaus (1968), resulted in the most widely accepted values of the Lang factor, which are included in Table 16.16 and are the factors recommended here for use in Eqs. (16.9) and (16.10). The detailed breakdown of costs by Peters and Timmerhaus is given in Table 16.17, which assumes that major plant additions are made to an existing site, but that additional land is purchased. The numbers in the table are based on a value of 100 for the total delivered cost of the process equipment. Here, the delivered cost is estimated as 1.05 times the... 

IIS estimate the total installed cost for a grass-roots plant producing an organic chemical (S-F process) on a continuous basis. We assume that the total cost of delivered equipment 2, (C )del is 1 million and use suitable factors from Table 9-51. 

The basis of the Factorial Methods is to use quotes or estimates of the delivered costs of the MPls and to multiply these up by so-called installation to obtain a total installed cost [40, 41]. 

The delivered cost of hydrogen from natural gas would need to become competitive with the delivered cost of gasoline. The infrastructure costs must be managed over time with total estimates reaching a trillion dollars or more. 

Study Method The single-factor method begins with collecting the delivered cost of various items of equipment and applying one factor to obtain the battery-hmits (BL) fixed capital (FC) investment or total capital investment as follows ... 

The asterisk on the receivers and accumulators indicates that if these vessels are pressure vessels, a factor of 4.0 should be used instead of 2.5. The total purchased equipment installed is 9,538,000 for non-pressure vessels and the delivered cost is 10,015,000. Therefore, the fixed capital investment installed would be 10,015,000 x 1.035 x 1.040 = 10,780,000. Using pressure vessels increases the total purchased equipment cost 667,000 therefore, the fixed capital investment for this case including inflation would be 10,780,000 x 1.05 x 1.035 X 1.04 = 11,534,000. 

The total delivered installed equipment cost is the fixed capital investment and, corrected for 2 years of inflation, will be 12,290,000 x 1.035 x 1.040 = 13,229,000. 

Gas liquefaction plants of new design that allows single-train operation (about 2.5-3 million tons per year or more) as opposed to earlier designs that required two trains (about 2.1-2.5 million tons each, 4.5-5 million total per plant). Other advances in LNG technologies (e.g. transportation and re-gasification) have also contributed to lowering the delivered cost of LNG ... 

Solar PV power costs Assumed transmission and distribution costs Total delivered Solar PV power costs... 

The total cost of electrolytic hydrogen from currently available technology is summarized in Table G-6. This table assumes a 14 percent capital cost-recovery factor, and presents the total cost (variable, capital, and O M) associated with the assumed fueling facility. The delivered cost of grid electricity is assumed at 7 cents/kWh. Total costs are in the range of 6.50/kg. 

The raw-materials inventory included in working capital usually amounts to a 1-month supply of the raw materials valued at delivered prices. Finished products in stock and semifinished products have a value approximately equal to the total manufacturing cost for 1 month s production. Because credit terms extended to customers are usually based on an allowable 30-day payment period, the working capital required for accounts receivable ordinarily amounts to the production cost for 1 month of operation. 

New pilot and commercial-scale equipment has been developed to blend and apply the composites and to determine total system costs (Figure 3). Several commercial-sized units based on the pilot design are now under construction. Each has a 500-gal capacity. They are fitted with a hot-oil heating system, heavy-duty mixers, and heated hoses that can deliver up to 200 lb/min of sulfur composite. They are designed to operate typically at 250°-300°F and at spray pressures of 20-100 psi. Each is self-contained except for electrical power which is provided by a stationary source or a portable generator. 

In the factor methods for cost estimating, first calculate the purchased or delivered cost of all major equipment, for example, distillation columns, reactors, pumps, heat exchangers, etc. Then multiply the total equipment cost by factors to estimate the various other components of the depreciable capital cost given in Equation 2.2, such as piping and electrical wiring. Thus, we arrive at the cost of installing all the equipment and supplying all the services needed to produce an operational process. 

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