As discussed by Woods 6 and Walas 7, when cost data are assembled from vendor quotes, they exhibit scatter due to different qualities of equipment design, fabrication, market conditions, vendor profit and other considerations.It is required to provide project analysis and evaluation, to select among alternative designs, to plan the appropriation of funds and to serve as a basis for project cost control.Capital cost estimation is also important for an engineerng students final design project.The generally accepted classification of capital cost estimates (Table 1) is published by the Association for the Advancement of Cost Engineering (AACE International).
Currently, several methods and associated computer programs exist for estimating capital cost, and they provide mainly study or preliminary estimates (Table 1; Class 4). ![]() The goals of this effort were to evaluate available cost estimation programs, apply the programs to case studies of plant design and to analyze the cost estimates for different types of equipment. They were evaluated using seven case studies taken from textbooks. The selected case studies involve petroleum refining, petrochemical and biopharmaceutical processes. ![]() Common methods for preliminary capital cost estimation are based on the Lang factor method, the detailed factorial method and the module costing method. Most available cost estimation programs in the open literature use one of these methods. Since the Lang factor is used across the whole plant, it applies the same installation factor to all equipment types in the plant, irrespective of material of construction and pressure. Sinnott and Towler 2 proposed a modified Lang factor method to estimate inside battery limit cost (CISBL) and fixed capital cost. This modified method accounts for varying installation factors in different processes, but not for different types of equipment. However, material of construction is considered through a material factor in calculating CISBL. This method is well accepted for estimating the cost of a new chemical plant in the preliminary stage. It is detailed, and includes a breakdown of cost categories for deriving installed costs from purchase costs. For each piece of equipment, Guthrie provided factors to estimate the direct costs of field materials, such as piping, concrete, steel, instruments, controllers, electrical hardware, insulation and paint, as well as the direct costs of field labor used for their installation. These factors include material erection and equipment setting, as well as the indirect costs involved in installation, such as insurance, construction overhead and contractor engineering expense. The bare module cost (CBM) for a given piece of equipment i is thus defined as. CM is the cost of field materials required for installation, CL is the cost of labor to install equipment and materials, CFIT is the cost of freight, insurance and taxes, CO is the cost of construction overhead and CE is the cost of contractor engineering expenses. For the whole plant, Ulrich and Vasudevan 4 propose to find the total module cost (CTM) by multiplying CBM,i for all equipment types by the factor 1.18 to account for contingency and contractor fee. Most programs use a parametric-cost model for the cost estimates, which is useful in early conceptual estimates 5. ![]()
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