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6.6: Process Economics Review

  • Page ID
    101184

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    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*}

    Terms to Know

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    https://pressbooks.bccampus.ca/chbe220/?p=2401


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