Process Economics Review

50 Process Economics Review

Total Capital Investment

T C I = F C I + W C

Effect of capacity on equipment prices

\frac{C_{a}}{C_{b}} = (\frac{A_{a}}{A_{b}})^{n}

$l n (C a) = l n (K) + n l n (A_{a})$

Effect of time on equipment prices

C_{2} = C_{1} (\frac{I_{2}}{I_{1}})

Preliminary Estimation of Purchased Equipment Costs

C_{e} = a + b S^{n}

Lang Factor

C_{T M} = F_{l a n g} \sum_{i = 1}^{n} C_{p, i}

Return on Investment

R O I = \frac{r e v e n u e - C O M}{T C I} \times 100

Revenue

r e v e n u e = u n i t p r i c e o f p r o d u c t \times s a l e s

Cost of manufacturing

\begin{aligned} c o s t o f m a n u f a c t u r i n g \\ = d i r e c t c o s t + f i x e d c o s t \\ + g e n e r a l e x p e n s e s \end{aligned}

Number of operating labour

N_{O L} = (6.29 + 31.7 P^{2} + 0.23 N_{n p})^{0.5}

Cost of operating labour

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Total direct cost of manufacturing

\begin{aligned} total direct cost of manufacturing \\ = C_{R M} + C_{W T} + C_{U T} + 1.33 C_{O L} + 0.03 C O M + 0.069 F C I \end{aligned}

Total fixed cost of manufacturing

\begin{aligned} total fixed cost of manufacturing \\ = 0.708 C_{O L} + 0.068 F C I + d e p r e c i a t i o n (0.1 F C I) \end{aligned}

Depreciation

\begin{aligned} depreciation \\ = \frac{purchased value - salvage value}{life of equipment (n)} \end{aligned}

General expenses

\begin{aligned} general expenses \\ = 0.177 C_{O L} + 0.009 F C I + 0.16 C O M \end{aligned}

Cost of manufacturing

\begin{aligned} cost of manufacturing \\ = 0.180 F C I + 1.23 (C_{R M} + C_{W T} + C_{U T}) + 2.73 C_{O L} + d e p r e c i a t i o n (0.1 F C I) \end{aligned}

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