Download - Chapter 8 - Cost of Manufacturing
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Chapter 8 Estimation of Manufacturing
Costs
Copyright - R.Turton and J. Shaeiwitz 2012 1
Chemical Engineering Department
West Virginia University
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Estimation of Manufacturing Costs
• Direct Costs
– Vary with production rate but not necessarily directly proportional
• Fixed Costs
– Do not vary with production rate but relate “directly” to production function
• General Expenses
– Functions to which operations must contribute – overhead burden
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Direct Costs
• Raw Materials
• Waste Treatment
• Utilities
• Operating Labor
• Supervisory and Clerical Labor
• Maintenance and Repairs
• Operating Supplies
• Laboratory Charges
• Patents and Royalties
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Fixed Costs
• Depreciation – cover as a separate topic in Chapter 9
• Local taxes and insurance
• Plant overhead costs
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General Expenses
• Administration costs
• Distribution and selling costs
• Research and development
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Manufacturing Costs
• Table 8.1 – Description of items
• Table 8.2 – Factors for estimating costs
* We relate (historically) the relationship between items in Table 8.1 to direct costs A (RM) , B (WT) , C (UT) , D (OL), and FCI of plant
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Manufacturing Costs - examples
• Maintenance and repairs – 2 – 10 % FCI
– Proportional to size of plant
• Supervisory and clerical labor – 10 – 25 % COL
– Proportional to op. lab
• Depreciation – some % of FCI
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Use mid-point values from Table 8.2
Note: using the mid-point values from Table 8.2 is a non-biased way of estimating COM but actual COM may be quite different depending on the plant and industry sector
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Manufacturing Costs
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0.280 2.73 1.23OL UT WT RMCOM FCI C C C C (8.1)
RMWTUTOLd CCCCFCICOM 23.173.2180.0 (8.2)
COM without depreciation – we use this since we calculate depreciation more accurately in Chapter 9
with depreciation as 10% FCI
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How Do We Get…..
• FCI – Chapter 7 CTM or CGR
• COL
• CRM
• CUT
• CWT
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Look at these separately
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Cost of Operating Labor
Example - acetone process
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2 0.5(6.29 31.7 0.23 )OL npN P N
NOL = the number of operators per shift
P = particulate processing steps
Nnp = non-particulate processing steps – compression, heating/cooling, mixing, separation, and reaction
Important note – Above equation based on data from chemical plants and refineries where number of particle processing steps is low. For units with more than 2 solids processing steps ignore middle term and add 1 operator per solids step
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Operating Labor – Acetone Facility
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Equipment Number of Nnp
Compressors 0 0
Exchangers 8 8
Fired Heaters 1 1
Pumps 5 -
Reactors 1 1
Towers 3 3
Vessels 4 -
Total 13
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Operating Labor – Acetone Facility
• NOL = [6.29 + (31.7)(0)2+ (0.23)(13)]0.5 = 3.05 • Number of operators required for one operator per shift = 4.5 = (49 wk/yr)(5 shifts/operator/wk) = 245 shifts/year/operator Total shifts per year = (365)(3 shifts per day) = 1095 shifts/year 1095 / 245 = 4.5 operators (for a single shift)
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Operating Labor – Acetone Facility
Total Operators = (3.05)(4.5) = 13.75 14
Salary = $59,580/y (2010 Gulf-Coast average)
COL = (59,580)(14) = $834K
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Cost of Raw Materials, Utilities, and Waste Treatment
• Flowrates
– Get these from PFD – use stream factor
• Costs
– Utilities and waste treatment - Table 8.3 – see Section 8.6 for utilities estimation
– Common chemicals – Table 8.4, Chemical Market Reporter, http://www.icis.com/StaticPages/a-e.htm#top
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Stream Factor
• Operating hours per year divided by total hours per year
– Typical 8000 operating hours
– 0.9 – 0.95 typical
8000/8760 = 0.913
* Flows on PFD are kmol/operating hour not kmol/hour – why?
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Utilities – Fuel and Electricity
• Fuel for Fired Heaters – PFD gives process load (energy balance) but total flow is more
due to efficiency – 70-90% from Table 11.11 – item 13.
– Fuel costs may vary wildly – Figure 8.1
• Electricity for pumps and compressors – Figure 8.7 – Shaft power – fluid power/efficiency
– Power to drive – shaft power/drive efficiency
* PFD usually gives shaft power – but be careful!
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Cost of Fuel – Utility costs
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Utilities - Steam
• Pressure levels
– Low (30 – 90 psi)
– Medium (150 – 250 psi)
– High (525 – 680 psi)
• Available saturated but sometimes superheated
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Utilities - Steam
• Large chemical complexes generate high-pressure steam and use excess pressure to generate electricity – Figure 8.6.
• Steam can be used as a drive medium for compressors and pumps – Thermodynamic efficiency – Table 8.5
– Drive efficiency – Figure 8.7
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Utilities - Steam
Copyright - R.Turton and J. Shaeiwitz 2012
Note: Modern supercritical power plants operate to give steam at 250 bar (3675 psi) and 1075◦F (580◦C)
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Utilities - Condensate Return and Boiler Feed Water
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Process
Steam
condensate returned to steam generating systems * just use steam costs
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If Steam Lost in Process
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gas and steam
stripping steam
use steam cost + bfw since condensate is not returned
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Steam Generated in Process
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process
bfw
steam
* just take credit for steam – unless steam is lost in process
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Utilities - Cooling Water
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Process 30°C 40°C
make up and chemicals
purge (blowdown)
evap + loss
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Utilities - Cooling Water
• Make-up based on DT (40 - 30) !
• Should charge cw based on energy used – Table 8.3
• Does not matter (much) if cw returned at 40C or 45C – same energy
• 45C is absolute max – due to fouling
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Utilities - Refrigerated Water
• Same as previous slide in that energy costs are not DT dependent – but cost based on 5°C supply temperature
• Figure 8.4 shows cost of refrigeration as a function of temperature
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8.4
Costs ($/GJ) CW = 0.354 RW = 4.43 -20C = 7.89 -50C = 13.11
Utilities – Refrigerated Water
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Summary
• FCI
• COL
• CUT From these get COMd
• CWT
• CRM
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