{"id":2401,"date":"2020-08-05T14:19:49","date_gmt":"2020-08-05T18:19:49","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/chbe220\/?post_type=chapter&p=2401"},"modified":"2020-08-11T14:18:43","modified_gmt":"2020-08-11T18:18:43","slug":"process-economics-review-2","status":"publish","type":"chapter","link":"https:\/\/pressbooks.bccampus.ca\/chbe220\/chapter\/process-economics-review-2\/","title":{"raw":"Process Economics Review","rendered":"Process Economics Review"},"content":{"raw":"

Important Equations<\/h2>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Total Capital Investment[latex][\/latex]<\/td>\r\n[latex]TCI=FCI+WC[\/latex]<\/td>\r\n<\/tr>\r\n
Effect of capacity on equipment prices<\/td>\r\n[latex]\\frac{C_a}{C_b}=\\Big(\\frac{A_a}{A_b}\\Big)^n[\/latex]\r\n\r\n[latex]ln(Ca)=ln(K)+n ln(A_a)[\/latex]<\/td>\r\n<\/tr>\r\n
Effect of time on equipment prices<\/td>\r\n[latex]C_2=C_1\\Big(\\frac{I_2}{I_1}\\Big)[\/latex]<\/td>\r\n<\/tr>\r\n
Preliminary Estimation of Purchased Equipment Costs<\/td>\r\n[latex]C_e=a+bS^n[\/latex]<\/td>\r\n<\/tr>\r\n
Lang Factor<\/td>\r\n[latex]C_{TM}=F_{lang}\\sum^{n}_{i=1}C_{p,i}[\/latex]<\/td>\r\n<\/tr>\r\n
Return on Investment<\/td>\r\n[latex]ROI=\\frac{revenue-COM}{TCI}\u00d7100\\text{%}[\/latex]<\/td>\r\n<\/tr>\r\n
Revenue<\/td>\r\n[latex]revenue=unit\\;price\\;of\\;product\u00d7sales[\/latex]<\/td>\r\n<\/tr>\r\n
Cost of manufacturing<\/td>\r\n\\begin{align*}\r\n&cost\\; of\\; manufacturing\\\\\r\n&=direct\\;cost+fixed\\;cost\\\\\r\n&\\;\\;+general\\;expenses\r\n\\end{align*}<\/td>\r\n<\/tr>\r\n
Number of operating labour<\/td>\r\n[latex]N_{OL}=(6.29+31.7P^2+0.23N_{np})^{0.5}[\/latex]<\/td>\r\n<\/tr>\r\n
Cost of operating labour<\/td>\r\n\\begin{align*}\r\n&\\text{# of operators}\\\\\r\n&=N_{OL}\u00d7\\frac{\\text{# of shifts in a year}}{\\text{# of shifts per operator}}\r\n\\end{align*}$$C_{OL}=\\text{# of operators}\u00d7salary$$<\/td>\r\n<\/tr>\r\n
Total direct cost of manufacturing<\/td>\r\n\\begin{align*}\r\n&\\text{total direct cost of manufacturing}\\\\\r\n&=C_{RM}+C_{WT}+C_{UT}+1.33C_{OL}+0.03COM+0.069FCI\r\n\\end{align*}<\/td>\r\n<\/tr>\r\n
Total fixed cost of manufacturing<\/td>\r\n\\begin{align*}\r\n&\\text{total fixed cost of manufacturing}\\\\\r\n&=0.708C_{OL}+0.068FCI+depreciation(0.1FCI)\r\n\\end{align*}<\/td>\r\n<\/tr>\r\n
Depreciation<\/td>\r\n\\begin{align*}\r\n&\\text{depreciation}\\\\\r\n&=\\frac{\\text{purchased value}-\\text{salvage value}}{\\text{life of equipment }(n)}\r\n\\end{align*}<\/td>\r\n<\/tr>\r\n
General expenses<\/td>\r\n\\begin{align*}\r\n&\\text{general expenses}\\\\\r\n&=0.177C_{OL}+0.009FCI+0.16COM\r\n\\end{align*}<\/td>\r\n<\/tr>\r\n
Cost of manufacturing<\/td>\r\n\\begin{align*}\r\n&\\text{cost of manufacturing}\\\\\r\n&=0.180FCI+1.23(C_{RM}+C_{WT}+C_{UT})+2.73C_{OL}+depreciation(0.1FCI)\r\n\\end{align*}<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n

Terms to Know<\/h2>\r\n[h5p id=\"11\"]","rendered":"

Important Equations<\/h2>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Total Capital Investment[latex][\/latex]<\/td>\n[latex]TCI=FCI+WC[\/latex]<\/td>\n<\/tr>\n
Effect of capacity on equipment prices<\/td>\n[latex]\\frac{C_a}{C_b}=\\Big(\\frac{A_a}{A_b}\\Big)^n[\/latex]<\/p>\n

[latex]ln(Ca)=ln(K)+n ln(A_a)[\/latex]<\/td>\n<\/tr>\n

Effect of time on equipment prices<\/td>\n[latex]C_2=C_1\\Big(\\frac{I_2}{I_1}\\Big)[\/latex]<\/td>\n<\/tr>\n
Preliminary Estimation of Purchased Equipment Costs<\/td>\n[latex]C_e=a+bS^n[\/latex]<\/td>\n<\/tr>\n
Lang Factor<\/td>\n[latex]C_{TM}=F_{lang}\\sum^{n}_{i=1}C_{p,i}[\/latex]<\/td>\n<\/tr>\n
Return on Investment<\/td>\n[latex]ROI=\\frac{revenue-COM}{TCI}\u00d7100\\text{%}[\/latex]<\/td>\n<\/tr>\n
Revenue<\/td>\n[latex]revenue=unit\\;price\\;of\\;product\u00d7sales[\/latex]<\/td>\n<\/tr>\n
Cost of manufacturing<\/td>\n\\begin{align*}
\n&cost\\; of\\; manufacturing\\\\
\n&=direct\\;cost+fixed\\;cost\\\\
\n&\\;\\;+general\\;expenses
\n\\end{align*}<\/td>\n<\/tr>\n
Number of operating labour<\/td>\n[latex]N_{OL}=(6.29+31.7P^2+0.23N_{np})^{0.5}[\/latex]<\/td>\n<\/tr>\n
Cost of operating labour<\/td>\n\\begin{align*}
\n&\\text{# of operators}\\\\
\n&=N_{OL}\u00d7\\frac{\\text{# of shifts in a year}}{\\text{# of shifts per operator}}
\n\\end{align*}$$C_{OL}=\\text{# of operators}\u00d7salary$$<\/td>\n<\/tr>\n
Total direct cost of manufacturing<\/td>\n\\begin{align*}
\n&\\text{total direct cost of manufacturing}\\\\
\n&=C_{RM}+C_{WT}+C_{UT}+1.33C_{OL}+0.03COM+0.069FCI
\n\\end{align*}<\/td>\n<\/tr>\n
Total fixed cost of manufacturing<\/td>\n\\begin{align*}
\n&\\text{total fixed cost of manufacturing}\\\\
\n&=0.708C_{OL}+0.068FCI+depreciation(0.1FCI)
\n\\end{align*}<\/td>\n<\/tr>\n
Depreciation<\/td>\n\\begin{align*}
\n&\\text{depreciation}\\\\
\n&=\\frac{\\text{purchased value}-\\text{salvage value}}{\\text{life of equipment }(n)}
\n\\end{align*}<\/td>\n<\/tr>\n
General expenses<\/td>\n\\begin{align*}
\n&\\text{general expenses}\\\\
\n&=0.177C_{OL}+0.009FCI+0.16COM
\n\\end{align*}<\/td>\n<\/tr>\n
Cost of manufacturing<\/td>\n\\begin{align*}
\n&\\text{cost of manufacturing}\\\\
\n&=0.180FCI+1.23(C_{RM}+C_{WT}+C_{UT})+2.73C_{OL}+depreciation(0.1FCI)
\n\\end{align*}<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Terms to Know<\/h2>\n
\n