chapter 8 turton 3rd
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E$timation of Manufacturing Cost$
Ch. 8, Turton 3rd edition
Day-to-day operating costs
• Expressed in $/time
• Direct manufacturing costs (DMC)– Proportional to production rate
• Fixed manufacturing costs (FMC)– Property taxes, insurance, and depreciation
• General expenses (GE)– Management, sales, finance, and research
• COM = DMC + FMC + GE
COM from Table 8.2 given:
1. Fixed capital investment (FCI) (CTM or CGR)
2. Cost of operating labor (COL)
3. Cost of utilities (CUT)
4. Cost of waste treatment (CWT)
5. Cost of raw materials (CRM)
COMd = 0.180FCI + 2.73COL + 1.23(CUT + CWT + CRM)excluding depreciation
Cost of operating labor
NOL = (6.29 +31.7P2 + 0.23Nnp)0.5
NOL = number of operators per shift
P = number of processing steps involving the handling of particulate solids
Nnp = number of nonparticulate processing steps = Σequipmenti
Equipmenti: (compressors, towers, reactors, heaters, exchangers)
245 shifts (8 hrs each)/operator/year
No. of shifts/year = 1095
No. of operators hired for each operator needed on any shift = 4.5
Indices to correct labor costs for inflation(source: the Oil and Gas Journal or Engineering News Record)
Avg. operator wage in: 1996 - $46,800/year2001 - $50,000/year2007 - $54,900/year
Gulf coast region, 2000 hr/yrVary considerably depending on plant location
Utility costs
• Directly influenced by cost of energy• Assume capital investment for utilities has
already been covered– CGR includes utility capital investments– CTM assumes utilities already in place
• Table 8.3 estimates operating costs needed to generate the utility streams
• Inflate using appropriate energy cost• Example 8.9
Raw materials costs
• Chemical Market Reporter no longer published:http://stlq.info/chemical_market_reporter/
• Last prices http://www.icis.com/chemicals/channel-info-chemicals-a-z/
• Sigma-Aldrich not representative• Spot versus contract prices• Seasonal price variations
Stream factor
SF = No. of days plant operates per year/365
Typical values: 0.9 – 0.96