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................................................ Pump Selection and Purchasing

critical continuous duty. For example if any Bidder has a Slenderness
Ratio of more than 2.5 times the lowest one, that Bidder would be
immediately disqualified from consideration. When a Bidder has a
Slenderness ratio of more than twice the lowest value, it could be
assessed the cost of a new mechanical seal and shaft.

5.3.3.7 Maintenance hours
It is estimated that the average oil refinery will spend $5,000.00 to
replace a mechanical seal. This only covers direct labor and overhead
charges. Consequently, consider one seal that costs $750.00 and needs
to be changed every year and compare it to another seal which costs
$2,000.00 and has to be changed every two years. While the first seal
may be lower in purchasing cost, the cost of ownership of the pump
over a 10 year period will be ($5,750 x 10) $57,500.00, against
($7,000 x 5) $35,000.00 with the higher priced, but more reliable seal.
This displays the importance of including the number of maintenance
hours which can be anticipated during the life of the pump.

5.3.3.8 Downtime and lost production

If there is an installed spare ready to run, then that factor can
sometimes be ignored. When there is no installed spare, the cost of
downtime is frequently so high that many will shortsightedly refuse to
recognize and consider it as a real evaluation factor.

5.3.3.9 The results
Some will recognize that we did not consider the existing spares for
other pumps in the plant, or the familiarity of operating and
maintenance personnel with the new pumps. Such considerations
should only be used if there is a very minimal difference in the
evaluated value as we are trying to ensure that we will not need a high
number of spares and that the amount of work needed on the new
pumps will be at an all-time low.

With all these factors taken into consideration, it is not uncommon for
the pump which might incur the highest capital cost to be the least
expensive to own in only a few years.
When Value Based Purchasing is carried out over an extended period of
time, it becomes evident that the initial capital cost of the equipment
fades into insignificance when compared to the total cost of ownership.

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