Page 353 - Analysis, Synthesis and Design of Chemical Processes, Third Edition

a. Is this process profitable?

b. What is the minimum number of batches/yr that would have to be produced to make the process
profitable?

c. If 26 batches/yr is the maximum that can be produced, what is the rate of return on the process?

Three different products are manufactured in an existing batch process. The details are as follows.

The annual cost of manufacturing is $0.95 million/yr. The demand for these products is increasing,
and the crystallization step has been determined to be the bottleneck to increasing the capacity. It is
desired to add 25% capacity to this process. The internal hurdle rate for process improvements is
17% p.a. over five years.
44.

a. If a new batch crystallizer, which allows for a 25% capacity increase, costs $750,000, do you
recommend this process improvement?

b. Capital funds are tight, and it has been determined that the maximum investment possible is
$600,000, resulting in a smaller, new crystallizer. Using this crystallizer, identical profitability as
found in Part (a) has been determined. Determine what capacity increase results from purchasing the
smaller crystallizer.

c. Suppose that it is now possible to purchase the $750,000 crystallizer, thereby increasing capacity
by 25%. However, the purchase of this crystallizer requires that the DCFROR (for this incremental
investment) is at least 40% over five years. Is this DCFROR reached?

A batch process runs on a zero-wait-time schedule (see Chapter 3). It has been determined that a
20% increase in capacity is possible if three equally sized storage tanks are purchased, and the
processing schedule is altered appropriately. The cost of manufacture is $1.5 million/yr with annual
revenues of $2.75 million/yr. The internal hurdle rate for process improvements is 20% p.a. over six

years.

45. a. If each tank costs $1.7 million, do you recommend the investment?

b. What is the maximum cost per storage tank that will meet the profitability criterion and result in a
20% increase in capacity?

c. Suppose that storage tanks each cost $2.0 million but still result in a 20% increase in capacity.
What is the DCFROR for the recommended process improvement?