E$timation of Manufacturing Cost$

Ch. 8, Turton 3rd edition

Day-to-day operating costs

Expressed in $/time Direct manufacturing costs (DMC)
Proportional to production rate

Fixed manufacturing costs (FMC)

Property taxes, insurance, and depreciation

General expenses (GE)

Management, sales, finance, and research

COM = DMC + FMC + GE

COM from Table 8.2 given:

1. Fixed capital investment (FCI) (CTM or CGR) 2. Cost of operating labor (COL) 3. Cost of utilities (CUT) 4. Cost of waste treatment (CWT) 5. Cost of raw materials (CRM)
COMd = 0.180FCI + 2.73COL + 1.23(CUT + CWT + CRM) excluding depreciation

Cost of operating labor

NOL = (6.29 +31.7P2 + 0.23Nnp)0.5
NOL P Nnp = number of operators per shift = number of processing steps involving the handling of particulate solids = number of nonparticulate processing steps = equipmenti

Equipmenti: (compressors, towers, reactors, heaters, exchangers)

245 shifts (8 hrs each)/operator/year No. of shifts/year = 1095 No. of operators hired for each operator needed on any shift = 4.5

Indices to correct labor costs for inflation

(source: the Oil and Gas Journal or Engineering News Record) Avg. operator wage in: 1996 - $46,800/year 2001 - $50,000/year 2007 - $54,900/year

Gulf coast region, 2000 hr/yr Vary considerably depending on plant location

Utility costs
Directly influenced by cost of energy Assume capital investment for utilities has already been covered
CGR includes utility capital investments CTM assumes utilities already in place

Table 8.3 estimates operating costs needed to generate the utility streams Inflate using appropriate energy cost Example 8.9

Raw materials costs

Chemical Market Reporter no longer published:http://stlq.info/chemical_market_ reporter/ Last prices http://www.icis.com/chemicals/channelinfo-chemicals-a-z/ Sigma-Aldrich not representative Spot versus contract prices Seasonal price variations

Stream factor
SF = No. of days plant operates per year/365 Typical values: 0.9 0.96