Page 109 - Materials Chemistry, Second Edition

5.3 The economic assessment—LCC 105

Maintenance cost

Operation cost Repairing cost

Administrative cost
Energy consumption cost
Utility cost
Water use and treatment cost
LCC
Project cost
Investment cost
Scrap value

Discount

Others Revenue

Income
FIG. 5.4 Content dependence classification.

5.3.1.1 Content dependence
On the basis of content, the LCC could be divided into four categories, which are operation
cost, utility cost, investment cost, and others, as shown in Fig. 5.4.

5.3.1.2 Time dependence
Two categories are divided from the LCC, initial cost and future cost, on the basis of time.
The initial cost is the total cost before the equipment is put into use, while the future cost is the
total cost of the equipment from being put into use to being scrapped. The future cost mainly
consists of nonrecurring cost and repetitive cost. The nonrecurring cost (nonannual cost) is
the sum of necessary nonrecurring expense to keep the equipment in good condition when
the equipment starts running. The repetitive cost (annual cost) is the accumulated cost reg-
ularly devoted to make the equipment run smoothly, including maintenance cost, operating
cost, administrative cost, and repair cost (Fig. 5.5).

5.3.1.3 Cost dependence
In consideration of cost dependence, an LCC could be divided into the three categories of
operation and maintenance cost, alternative cost, and construction cost. Some subclasses are
also included in this classification, so that cost function can be defined. Each cost can be
expressed by a tree diagram (different equipment consists of different costs) for the conve-
nience of observing and cost analysis.