Page 217 - Plant design and economics for chemical engineers

COST ESTIMATION 189

Relative productivity factor-Southwest 1.04 from Table 20
Relative productivity factor-Pacific Coast 0.89 from Table 20
0.89
Relative productivity factor ratio = 104 = 0.8558

Construction labor cost of Southwest to Pacific Coast = (1.3864)/(0.8558) = 1.620
Construction labor cost at Los Angeles = (1.620X$100,000) = $162,000

To determine the fixed-capital investment required for a new similar-
single-process plant at a new location with a different capacity and with the
same number of process units, the following relationship has given good results:

cl = R”[ f& + f,M + fLfF4EL + f,W)] (f& (10)

where fE = current equipment cost index relative to cost of the purchased
equipment
f,,, = current material cost index relative to cost of material
M = material cost
fL = current labor cost index in new location relative to E, and ML at
old location
eL = labor efficiency index in new location relative to EL and ML at old
location
EL = purchased-equipment labor cost
ML = labor employee-hours for specific material
f,, = specific material labor cost per employee-hour
C = original capital investment
In those situations where estimates of fixed-capital investment are desired
for a similar plant at a new location and with a different capacity, but with
multiples of the original process units, Eq. (11) often gives results with some-
what better than study-estimate accuracy.
C,, = [ Rf,E + R”f,M + R”f,f,e,@, + f,JC)] (f& (11)

More accurate estimates by this method are obtained by subdividing the
process plant into various process units, such as crude distillation units, reform-
ers, alkylation units, etc., and applying the best available data from similar
previously installed process units separately to each subdivision. Table 19 lists
some typical process unit capacity-cost data and exponents useful for making
this type of estimate.

Example 5 Estimation of fixed-capital investment with power factor applied to
plant-capacity ratio. If the process plant, described in Example 1, was erected in
the Dallas area for a fixed-capital investment of $436,000 in 1975, determine what
the estimated fixed-capital investment would have been in 1980 for a similar
process plant located near Los Angeles with twice the process capacity but with an
equal number of process units? Use the power-factor method to evaluate the new
fixed-capital investment and assume the factors given in‘Table 20 apply.