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Cost Calculations
Cost estimates for bidding on welding work in projects Setting rates for incentive Programs Comparing Welded construction to alternatives Comparing competing welding processes
Cost Calculations
Cost of Welding
($/ft) Cost incurred to make a weld (includes joint prep, consumables, labor, overhead, pre- & post-weld treatment, etc.) Used to compare cost advantages of weld vs. Other manufacturing processes Used to decide on the most cost effective joint design or most cost effective welding process to use Used as a basis for investment in new automated equipment
Cost of Weldment
($/piece) Cost incurred to make entire structure (includes all of above plus summation of all the weldments and raw material costs) Used to bid on a welding job
Cost Calculations
The Basis - Welding Procedure Specification (WPS) This is the starting point for cost estimating.
Procedure should include: Joint details Welding process Type of filler Type of gas/fluxes Welding current Position (operator factor) Travel speed Post weld treatment
Cost Calculations
Main Factors
INDIVIDUAL PARTS OF ESTIMATE (Look at each item individually) 1. Cost of Joint Prep 2. Cost of Materials (Consumables) 3. Cost of Materials (Flux & Shielding) 4. Labor Costs 5. Power Costs 6. Post Weld Costs 7. Overhead Costs
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
Cost Calculations
1. Cost of Joint Preparation Machined Joints - (most expensive) Flame or Plasma Cut Joints Square Butt w/o Surface Prep - (least expensive) A) Do cost analysis on several joint designs to minimize joint prep cost: Note:If a non-prequalified joint is used, you may incur the added cost of procedure qualification. B) Trade off reduced costs to prepare joint with amount of weld metal to fill joint. Example: A submerged arc joint can be flame cut (inexpensive) but may require a lot of weld metal to fill the joint (expensive).s
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
Cost Calculations
2. COST OF MATERIALS (CONSUMABLES) Procedure a) Calculate the theoretical weight of weld metal required to fill the weld joint b) Calculate the weight of filler actually consumed (spatter etc. included)
1. 2. Estimating Losses Automated Method
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
Cost Calculations
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
a)
Cost Calculations
b)
c)
Calculate the theoretical weight of weld metal required to fill the weld joint Calculate the weight of filler actually consumed (spatter etc. included) 1) Estimating Losses 2) Automated Method Calculate the electrode costs
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
Cost Calculations
Calculate the theoretical weight of weld metal required to fill the weld joint Calculate the weight of filler actually consumed (spatter etc. included) 1) Estimating Losses 2) Automated Method Calculate the electrode costs
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
Cost Calculations
Calculate the theoretical weight of weld metal required to fill the weld joint Calculate the weight of filler actually consumed (spatter etc. included) 1) Estimating Losses 2) Automated Method Calculate the electrode costs
2. COST OF MATERIALS (CONSUMABLES) b) Wt of filler required Wt of filler Required (lbs) = Th wt of deposit (lbs) / (1- total electrode loss) Wt of filler Required (lbs) = Th wt of deposit (lbs) / {filler metal yield (%) } Wt of filler Required (lbs/hr) = Wire feed speed (in/min) x 60 . Length of wire per weight (in/lb)
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
Cost Calculations
Calculate the theoretical weight of weld metal required to fill the weld joint Calculate the weight of filler actually consumed (spatter etc. included) 1) Estimating Losses 2) Automated Method Calculate the electrode costs
2. COST OF MATERIALS (CONSUMABLES) c) Calculating the Electrode Cost Electrode Cost ($/ft) = Wt of filler required (lbs)x Electrode Price ($/lb)
Electrode Cost ($/ft) = Th wt of deposit (lbs/ft) x Electrode Price ($/lb) Filler metal yield (%)
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
Cost Calculations
3. COST OF MATERIALS (FLUX & SHIELDING GASES) Calculation of Flux Costs Flux Cost ($/ft)=Flux price ($/lb) x Weld Metal Deposit (lb/ft) x Flux ratio Where, Flux Ratio = Wt of Flux (lb) Wt of Wire (lb) Sub Arc = 1-1.5 (approx. 1 lb flux/ 1 lb wire) Electroslag = 0.05-0.10 Calculation of Shielding gas and Backing gas Costs
Gas Cost ($/ft) Gas Cost ($) Gas Cost ($) = = = {gas price ($/ft3) x flow rate (ft3/hr)} Travel (ipm) x 1/12(ft/in) x 60(min/hr) Weld Gas Cost ($/ft) * feet of weld
Or
{Gas price ($/ft3) x flow rate (ft3/hr) x weld time (min)} 60 (min/hr)
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
Cost Calculations
4. LABOUR COST (single greatest factor in total cost of weldment) Operator Factor: percent of time that a welder is actually making a useful weld.
Semi-automatic and automatic plants have higher operator factors Field welding / construction work with small welds in scattered locations have low operator factor Welding in the flat position has higher operator factor than horizontal, vertical, overhead: 1. Faster travel speed 2. Fewer defects / fewer repairs Use of fixtures, positioners, and handling equipment increases operator factor Slag chipping, electrode changes, moving from joint to joint all reduce operator factor
Welder pay rate ($/hr) . Travel Speed (in/min) x Operator Factor (%) x 5
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
Cost Calculations
Deposition Rate (lb/hr) = melt of rate (in/min) x 60 x Filler Metal yield (%) Length of electrode wire per weight (in/lb) Labor Cost ($/ft) = Welder pay rate ($/hr) x Weight of weld metal deposit . Deposition Rate (lb/hr) x Operator Factor (%)
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
Cost Calculations
5. Power Costs
Local Power Rate ($/kWh) includes: Energy charge Fuel adjustment charge Taxes Demand charge (time of day) Power factor penalty Power Source Efficiency (%) See machine performance curves (see attached)
Power Cost ($/ft)= local power rate ($/kWh) x volts x amps x Wt Weld metal deposit (lb/ft)}
1000 x dep rate (lb/hr) x OpFact (%) x Pow Source Eff (%)}
INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs
OVERHEAD COSTS
Salaries: executives, supervisors, inspectors maintenance people, janitor, etc. (those costs which can not charge directly to weldment costs) Rent / Depreciation of plant Taxes Maintenance supplies and costs Utilities (not charged to weldment) i.e. light, plant heat, etc. Employee benefits Insurance
Overhead cost ($/ft) = Overhead rate ($/hr) x Wt Weld (lb/ft) dep rate (lb/hr) x OpFact (%)
Welding Cost - Per Foot Analysis Cost of Joint Prep ($/ft) Cost of Weld Metal Flux Cost Gas Cost Misc. guide tubes etc. Labor Cost ($/ft) Power Costs Overhead Costs TOTAL
Welding Cost - Per Piece Analysis Base Material Cost ($/pc) Cost of Joint Prep Cost of Weld Metal Flux Cost Gas Cost Misc. guide tubes etc. Labor Cost ($/pc) Power Cost Post Weld Costs Overhead Costs ($/pc) TOTAL