Estimation of Manufacturing Costs
Introduction
Cost associated with day to day operation of a chemical plant
The primary components of the cost of manufacture are raw materials, utilities, and waste treatment
Estimation of Manufacturing Cost
Direct Cost
Fixed Costs
General Expenses
- Include expenses directly associated with the manufacturing operation
- Vary with production rate but not necessarily directly proportional
- expenses that remain practically constant from year to year
- Do not vary with production rate but relate “directly” to production function
- Functions to which operations must contribute –overhead burden
- For hospital and medical services, general plant maintenance and overhead etc
- Do not vary with changes in production rate
- Raw Materials
- Waste Treatment
- Utilities
-Operating Labor - Supervisory and Clerical labor
- Maintenance and Repairs
- Operating Supplies
- Laboratory Charges
- Patents and Royalties
- Rent
- Local Taxes and Insurances
- Depreciation
- Administration costs
- Distribution and selling costs of products
- Research and development expenses such as salaries, special equipment, research facilities and consultant fee
Manufacturing Costs
Table 8.1
Description of items
Table 8.2
Factors for estimating costs
COM = DMC + FMC + GE
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
Cost of Operating Labor
NOL = the number of operators per shift
P = particulate processing steps
Nnp = non-particulate processing steps – compression,
heating/cooling, mixing, separation, and reaction
Cost of Raw Materials, Utilities, and Waste Treatment
Flowrates
Costs
Get these from PFD
(use Stream factor)
Utilities and waste treatment (Table 8.3)
Common chemical (Table 8.4)
Stream Factor
Operating hours per year divided by total hours per year
Typically 8000 operating hours
0.9 - 0.95 typical
8000/8760 = 0.913
Utilities (Fuel and Electricity)
Fuel for Fired Heaters
Electricity for pumps and compressors
PFD gives process load (energy balance) but total flow is more due to efficiency - 70-90% from Table 11.11
Fuel cost may vary wildly
Shaft power (fluid power/efficiency)
Power to drive (shaft power/drive efficiency)
Utilities (Steam)
Pressure levels
Available saturated but sometimes superheated
Low (2-6 bar)
Medium (10-17 bar)
High (44.3 bar)
Large chemical complexes generate high-pressure steam and use excess pressure to generate electricity
Steam can be used as a drive medium for compressors and pumps
Thermodynamic efficiency
Drive efficiency
Utilities (Cooling Water)
Make-up based on Delta T (40-30)
Should charge cw based on energy used (Table 8.3)
Does not matter (much) if cw returned at 40 or 45 degree Celsius (same energy)
45 degree Celsius is absolute max (due to fouling)
Utilities (Refrigerated Water)
Energy costs are not Delta T dependent (cost based on 5 degree Celsius supply temperature)