# 50 Process Economics Review

## Important Equations

 Total Capital Investment $TCI=FCI+WC$ Effect of capacity on equipment prices $\frac{C_a}{C_b}=\Big(\frac{A_a}{A_b}\Big)^n$ $ln(Ca)=ln(K)+n ln(A_a)$ Effect of time on equipment prices $C_2=C_1\Big(\frac{I_2}{I_1}\Big)$ Preliminary Estimation of Purchased Equipment Costs $C_e=a+bS^n$ Lang Factor $C_{TM}=F_{lang}\sum^{n}_{i=1}C_{p,i}$ Return on Investment $ROI=\frac{revenue-COM}{TCI}×100\text{%}$ Revenue $revenue=unit\;price\;of\;product×sales$ Cost of manufacturing \begin{align*} &cost\; of\; manufacturing\\ &=direct\;cost+fixed\;cost\\ &\;\;+general\;expenses \end{align*} Number of operating labour $N_{OL}=(6.29+31.7P^2+0.23N_{np})^{0.5}$ Cost of operating labour \begin{align*} &\text{# of operators}\\ &=N_{OL}×\frac{\text{# of shifts in a year}}{\text{# of shifts per operator}} \end{align*}$$C_{OL}=\text{# of operators}×salary$$ Total direct cost of manufacturing \begin{align*} &\text{total direct cost of manufacturing}\\ &=C_{RM}+C_{WT}+C_{UT}+1.33C_{OL}+0.03COM+0.069FCI \end{align*} Total fixed cost of manufacturing \begin{align*} &\text{total fixed cost of manufacturing}\\ &=0.708C_{OL}+0.068FCI+depreciation(0.1FCI) \end{align*} Depreciation \begin{align*} &\text{depreciation}\\ &=\frac{\text{purchased value}-\text{salvage value}}{\text{life of equipment }(n)} \end{align*} General expenses \begin{align*} &\text{general expenses}\\ &=0.177C_{OL}+0.009FCI+0.16COM \end{align*} Cost of manufacturing \begin{align*} &\text{cost of manufacturing}\\ &=0.180FCI+1.23(C_{RM}+C_{WT}+C_{UT})+2.73C_{OL}+depreciation(0.1FCI) \end{align*}