REGRESSION ANALYSIS OF THE MANUFACTURING

COST OF RECIPROCATING AMMONIA REFRIGERATION

COMPRESSORS AND AS A FUNCTION
OF PARAMETERS

L. K. Antonov and I. A. Bocharov UDC 338.5:621o57.001.5

Parametric methods of price estimating can be widely applied to determine budget (manufacturing)
cost and selling price of machinery and equipment at different stages of development, including research,
assigning technical design tasks, etc. This analysis consists of formulating empirical cost equations as
a function of equipment technical parameters. Cost or selling price is considered as a function of the
main technical parameters of the product:
C(C) =I(.v~, x2..... x~),

w h e r e C(C) is the a v e r a g e adjusted cost (selling price); xl, x 2. . . . . Xn a r e the product technical p a r a m -
e t e r s s e l e c t e d f r o m standards and technical s p e c i f i c a t i o n s .
T h e s e functions a r e used to f o r e c a s t cost and selling price based on the product quality indicators
and t e c h n o l o g i c a l standards.
E c o n o m i c a l l y iustified s e l e c t i o n of p a r a m e t e r s for investigation is m o r e c o m p l e x and l e s s fully de-
veloped in such calculations.
The quality and technical standard of m a c h i n e r y and apparatus is d e t e r m i n e d f r o m p a r a m e t e r s such
as p e r f o r m a n c e and power, weight and s i z e , d e g r e e of standarization, and operating and production char-
a c t e r i s t i c s . T e c h n i c a l calculations show that alt p a r a m e t e r s of m a c h i n e r y and apparatus are interrelated
and interdependent. Throughput capacity (TC) of a c o m p r e s s o r , for example, can be r e p r e s e n t e d by the
function

TABLE 1
Wholesale sell- Deviation of
Refrigeration § Ternpera-+[ingpricere- /caleulatedma-
capacity, * Weight , Shaft rpm "~ ture level ~| lative to an ! nufacturing
Types and configurations of refrigeration compressors kcal • 103 kg ( x , ) degrees ] A V 2 2 tom- ]cost from ac-
(x,) (x4) /p ...... I tual. r/-

Packed:
low throughput capacity:
AV22 22 160 1440 15 1,00 II
AU45 45 270 144h 15 1,58 6
AUU90 90 450 1440 15 2,64 --10
high throughput capacity:
AVI00 100 1 5q3 960 15 5,39 --12
AU200 2O0 2 372 9G0 15 7,79 2
4O0 4 243 960 15 16,36 --I
AUU400
Opposed; 15 25,76 lq
AO600 6O0 5 800 500
AO 1 2 0 0 1200 IO 800 500 15 49,39 --6
Two-stage;
DAUh0 50 2 452 96O 40 8,39
DAUU100 100 3 561 960 40 13,03 9
DAf)275 275 7 250 500 4f) 2~,03 4
.])AO550 530 13 250 5~0 4O 56,06 fl
DAON 175 175 7 3UO 5O0 51) 27,27 --1
DAON350 350 13 3~0 500 50 54,34 I

* Basic parameter.
"[" Calculated parameter,

Translated f r o m K h i m i c h e s k o e i Neftyanoe Mashinostroenie, No. 11, pp. 27-29, D e c e m b e r , 1975.

9 Plenum Publishing Corporation, 22 7 West 17th Street, New York, N. Y. 10011. No part o f this publication may be reproduced,
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 TABLE 2
Deviation of calculated cost from actual of representative I
Equation pre~ucts (eom~essors with the lowest throughput capacity
number
m me group).~/o - -- - - t
Regression equation
ooooo I
C r = 95,2Xl0,74 --28 --16 --59 29 27 48 I
I
C r = 8728462000x3 2'23
C r = 2763565000000xl 9'27 x 3 2'9
C r = 124,7X1'02
C t = 15859320x~' 16 "r3 1,59 x],42 2 --10 6 5 2 2
C r = 6,35x~ '82 5 --17 --4 7 3 3
11 --12 I0 --6 4 --I

TC =fit(p), V, n, s(d, z ..... m],

where t is the operating t e m p e r a t u r e level of the c o m p r e s s o r , p is p r e s s u r e , V is the t h e o r e t i c a l volume
(hourly) t r a v e r s e d by the piston, n is the c o m p r e s s o r shaft rotational speed, s is piston stroke, d is c y -
linder d i a m e t e r , z is the number of c y l i n d e r s , and m is c o m p r e s s o r weight.
Any other p a r a m e t e r , including c o m p r e s s o r weight, can be e x p r e s s e d in the s a m e m a n n e r :

m=~[TC, t(p), V, n, s, z, .:.] and so on.

The c a u s e - - effect relationship between cost (selling price) and c o m p r e s s o r p a r a m e t e r s can be
written in the following f o r m :
c(c) = f ( t h ) = f [ T C t(p), n]=i(tz)=f(d, s, z ) = i ( V ) and so on.

Any i n t e r p r e t a t i o n of the c o m p r e s s o r cost (selling price) - - p a r a m e t e r relationship is theoretically

possible. This relationship is m o r e closely defined and is a l m o s t functional for the same type of equip-
ment produced on the s a m e s t r u c t u r a l b a s e . This relationship is less sharply defined and is c o r r e l a t i v e
in analyzing a whole p a r a m e t r i c s e r i e s of c o m p r e s s o r s , r e p r e s e n t i n g different types and configurations,
Table 1 p r e s e n t s the e n g i n e e r i n g - c o s t data of v a r i o u s r e f r i g e r a t i o n c o m p r e s s o r types. Each type
has some design feature which is reflected in the p a r a m e t e r s and manufacturing cost of the c o m p r e s s o r s .
Opposed c o m p r e s s o r s , for example, differ f r o m packed machines in throughput capacity and shaft r p m
arid in throughput capacity and t e m p e r a t u r e level f r o m t w o - s t a g e machines. In addition, c o m p r e s s o r s of
all sizes and types have different weights.
The relationship between throughput capacity, weight and cost was differentiated for each type of
c o m p r e s s o r . The relationship between these p a r a m e t e r s is close to 2 for low throughput capacity packed
c o m p r e s s o r s . It b e c o m e s 1.1-3.2 for high throughput capacity packed c o m p r e s s o r s . The effect of weight
on cost of c o m p r e s s o r s (in a group) is less than that of throughput capacity.
Calculated c o r r e l a t i o n coefficients n o r m a l l y indicate the strength of the relationship. In this case,
the coefficients have the following values:
.VIA"? .'(~.V3 A'2_V3 XzX t A'4X~ .ViX ~
7 0 - - 62 - - I3 - - 83 49 - - 53

It is known (correlation theory) that strongly related p a r a m e t e r s should not be used in this type of
investigation. However t h e r e a r e no quantitative c r i t e r i a of relationship strength. It is suggested that
c o r r e l a t i o n coefficients between product p a r a m e t e r s should not exceed 60-65%.
Manufacturing cost of r e f r i g e r a t i o n c o m p r e s s o r s as a function of each of the above p a r a m e t e r s was
investigated by the exponential form of multiple r e g r e s s i o n . This is most commonly used for in r e f r i g e r a -
tion equipment construction. Analysis of the study r e s u l t s (Table 2) showed that calculated cost deviations
(from actual) a r e not significantly affected by interrelationship. Let us c o m p a r e the deviations calculated
f r o m r e g r e s s i o n equations (7), (6), and (5). The r e g r e s s i o n sign (plus or minus) does not always c o r r e -
spond to economic and engineering concepts of the cost (selling price) relationship to the equipment p a r a m -
eters.

According to c o r r e l a t i o n theory, the r e g r e s s i o n coefficients must be positive if the investigated

p a r a m e t e r s a r e d i r e c t l y r e l a t e d and negative if the relationship is i n v e r s e . In this case production costs

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for l o w - t e m p e r a t u r e , high throughput capacity machines a r e much higher than for l o w - c a p a c i t y c o m p r e s -
s o r s . At the s a m e t i m e h i g h - c a p a c i t y e o m p r e s s o r s have lower shaft r p m than l o w - c a p a c i t y m a c h i n e s f o r
a v a r i e t y of r e a s o n s . Thus, t h e r e is a d i r e c t r e l a t i o n s h i p between cost and p a r a m e t e r s such as t h r o u g h -
put capacity and t e m p e r a t u r e level. Manufaeturing cost and shaft r p m a r e i n v e r s e l y p r o p o r t i o n a l . This
is v e r i f i e d by the signs (plus or minus) of the exponents in r e g r e s s i o n equations (1), (2), (4)-(6): positive
for x 1, x 2, and x 4 and negative for x 3.
R e g r e s s i o n equations (3) and (7) do not exhibit this r e l a t i o n s h i p ; the exponent of x 1 in Eq. (3) is neg-
ative but the exponent of x 3 in Eq. (7) is positive. This is always o b s e r v e d when the studied p a r a m e t e r s
a r e s e l e c t e d without considering the c a u s e -- effect relationship.
C o m p r e s s o r manufacturing cost cannot be r e p r e s e n t e d by function C = f(TC, n) or f(x 1, x2). It is
known that the cost for producing t w o - s t a g e r e f r i g e r a t i o n c o m p r e s s o r s is higher than that for s i n g l e - s t a g e
c o m p r e s s o r s since t w o - s t a g e c o m p r e s s o r s r e p r e s e n t a unit consisting of two s i n g l e - s t a g e c o m p r e s s o r s .
Let us c o m p a r e the p a r a m e t e r s s e l e c t e d for studying s i n g l e - s t a g e A V100 and t w o - s t a g e DAUU100 c o m p r e s -
s o r s . Both c o m p r e s s o r s h a v e the s a m e throughput capacity and shaft r p m . T h e s e p a r a m e t e r s , t h e r e f o r e ,
do not c o m p l e t e l y c h a r a c t e r i z e the c o m p r e s s o r manufacturing cost d y n a m i c s shown in T a b l e 1. Varying
t h e s e p a r a m e t e r s in a p a r a m e t r i c c l a s s of c o m p r e s s o r s has different effects on manufacturing cost.
The c o m p r e s s o r cost is a function of two m o r e p a r a m e t e r s in r e g r e s s i o n equation (7). weight and
t e m p e r a t u r e level which v a r y nonuniformly over the s i z e s of c o m p r e s s o r s . Size affects weight in each
c l a s s of c o m p r e s s o r while t e m p e r a t u r e Ievel changes only between s i n g l e - s t a g e and t w o - s t a g e c o m p r e s -
s o r s . The c a u s e - - effect r e l a t i o n s between p a r a m e t e r s of r e g r e s s i o n equation (7) can, t h e r e f o r e , be
r e p r e s e n t e d as function
c(c) =f(m)=ftzc, t(p), n],

Under no circumstances can it be represented by function

C(C) =f[TC, i(p), n. m )

C o r r e l a t i o n theory shows that the study r e s u l t s b e c o m e m o r e a c c u r a t e as m o r e p a r a m e t e r s a r e

used in the a n a l y s i s . The calculations c a r r i e d out showed that m i n i m u m deviations (calculated f r o m actual
data) a r e obtained when t h r e e p a r a m e t e r s (throughput, shaft r p m , and t e m p e r a t u r e level) a r e used to ~te-
r i v e the r e g r e s s i o n equation. This equation e o r r e s p o n d s to the engineering and cost concepts of cost vs
e o m p r e s s o r p a r a m e t e r r e l a t i o n s h i p . The economic significance of p a r a m e t e r s e l e c t i o n in this e a s e is as
follows. Throughput capacity c h a r a c t e r i z e s cost ehange for different s i z e s for a given c o m p r e s s o r type.
Shaft r p m and t e m p e r a t u r e level c h a r a c t e r i z e manufacturing cost v a r i a t i o n between c o m p r e s s o r t y p e s .
This method of p a r a m e t e r s e l e e t i o n ean be a l s o used to find the analytieal f o r m s e x p r e s s i n g t h e i r
r e l a t i o n s h i p to manufacturing eost for other equipment which can be a r r a n g e d in a p a r a m e t r i c s e r i e s of
v a r i o u s types and configurations.

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