Updation of cost correlations

• However it takes years to build a chemical plant

and so we must be able to predict future costs

Base costin present year  Base costin certain year i.e. base year 
 cost index for present year 
 
 cost index for base year 

1 Dr. Pradipta Chattopadhyay | BITS Pilani, Pilani Campus

Cost Models: Total Capital
Investment
Total Capital Investment  Fixed Capital  Working Capital  Start - up

WorkingCap ital  0.15Tot. Inv.

Start - up  0.1Fixed Cap.

Fixed Capital  Direct Cost  Indirect Cost

DirectCost  Onsite  Offsite

Onsite  Installed Equipment Cost Offsite  0.45(Onsite)

2 Dr. Pradipta Chattopadhyay | BITS Pilani, Pilani Campus

Cost Models: Total Capital
Investment
Indirect Cost  Owner' s cost  Conting.
Owner' s cost  0.05Onsite  Offsite 
Conting.  0.20Onsite  Offsite 
Fixed Cap.  Onsite  Offsite  Owner' s Cost  Conting.
 1.25Onsite  Offsite 

Tot. Cap. Inv.  Fixed Capital  Working Capital  Start - up

 Fixed Capital  0.15Tot. Cap. Inv.  0.1Fixed Cap.

Tot. Cap. Inv.  2.36Onsite 

3 Dr. Pradipta Chattopadhyay | BITS Pilani, Pilani Campus
Cost Models: Total Product
Cost

Total Product Cost  1.03Raw Matl.  Util.   2.13Labor

 0.103Fixed Cap.  0.025Revenue 

Fixed Cap.  1.81Onsite  Labor  105 Operators

For small process, 24hr/day, 7 days/wk

Total Product Cost  1.03Raw Matl.  Util.   0.186Onsite 

 2.13 10 5 Operators
 0.025Revenue 
4 Dr. Pradipta Chattopadhyay | BITS Pilani, Pilani Campus
 Important References

• M.S. Peters & K.D. Timmerhaus, Plant Design and Economics for
Chemical Engineers, McGraw- Hill, 4th Edition, 1991.

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