Estimation of production cost and revenue

Variable Cost of Production

Estimating Variable Production Costs

Raw Materials Cost

These are the costs of chemical feed stocks required by the process. Feed stocks flow rates are obtained from PFD [6].

Utilities Cost

These are the costs of the various utilities streams required by the process. The flowrates for the utilities streams are located on the PFD [6]. This includes:

• Fuel gas, oil, or coal
• Electric power
• Steam
• Cooling water
• Process water
• Boiler feed water
• Air
• Inert gas
• Refrigeration

Waste Disposal Costs

These are defined as the cost of waste treatment to protect the environment [6].

Fixed Cost of Production

Estimating Fixed Production Costs

Labor Costs

These are the costs attributed to the personnel required to operate the process plant [6].

Maintenance Costs

Part of these costs are associated with labor and materials necessary to maintain plant production [6].

Research and Development

These are the costs of research done in developing the process and/or products. This includes salaries for researchers as well as funds for research related equipment and supplies [6].

References

1. Wankat, P.C. (2012). Separation Process Engineering. Upper Saddle River: Prentice-Hall.
2. Towler, G.P. and Sinnot, R. (2012). Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design.Elsevier.
3. Biegler, L.T., Grossmann, L.E., and Westerberg, A.W. (1997). Systematic Methods of Chemical Process Design. Upper Saddle River: Prentice-Hall.
4. Peters, M.S. and Timmerhaus, K.D. (2003). Plant Design and Economics for Chemical Engineers, 5th Edition. New York: McGraw-Hill.
5. Seider, W.D., Seader, J.D., and Lewin, D.R. (2004). Process Design Principles: Synthesis, Analysis, and Evaluation. New York: Wiley.
6. Turton, R.T., Bailie, R.C., Whiting, W.B., and Shaewitz, J.A. (2003). Analysis, Synthesis, and Design of Chemical Processes Upper Saddle River: Prentice-Hall.