[Topic 7] Estimating Plant and Equipment Cost Flashcards
Index value for a given time showing the cost at that time relative to a certain base time.
Cost Index Method
Original cost times the ratio of present index value to index value applicable when the original cost was obtained.
Cost Index Method
This can be done when data for future indexes are not available.
Extrapolating the Data
If equipment cost is a function of time, Present cost can be solved by?
Dividing the index value at present by index value at time of the original cost and then multiply it to the Original cost.
Where do you get cost indices?
Records of the movement of costs through time by various organizations or institutions.
Movement of costs through time includes?
- Cost of equipment in different industries
- Cost of constructing various buildings and industries
- Cost of constructing refinery plants
- Cost of making ChE equipment and ChE plants
Different Cost Index
- Marshall & Swift Equipment Cost Index
- Engineering News-Record Construction Index
- Nelson-Farrar Refinery Construction Index
- Chemical Engineering Plant Cost Index
Originally known as Marshall and Stevens Index and was established in 1926 with a value of 100.
Marshall & Swift Equipment Cost Index
This involves a composite of two major components: process industry equipment average and all-industry equipment average.
Marshall & Swift Equipment Cost Index
Some industries considered in the process-industry equipment average.
Chemicals, petroleum products, rubber, and paper.
The all-industry average encompasses of how many?
47 different types of industrial, commercial, and housing equipment
How often was the Marshall and Swift Equipment Cost index published in each issue of chemical engineering?
Published monthly until April 2012
An American weekly magazine that provides news, analysis, data and opinion for the construction industry worldwide.
Engineering News-Record Construction Index
Its subscribers include contractors, project owners, engineers, architect, public works officials and industry suppliers.
Engineering News-Record Construction Index
It covers the design and construction of high-rise buildings, stadiums, airports, long-span bridges, dams, tunnels, power plants, industrial plants, water and wastewater projects, and toxic waste cleanup projects.
Engineering News-Record Construction Index
It also covers the construction industry’s financial, legal, regulatory, safety, environmental, management, corporate, and labor issues.
Engineering News-Record Construction Index
Originally known as the Nelson Refinery Construction Indexes and established in 1946 with a value of 100, the index is more suitable for petroleum or petrochemical business. Published once a month in the Oil and Gas Journal.
Nelson-Farrar Refinery Construction Index
Composed of four major components: equipment, construction labor, buildings, and engineering and supervision.
Chemical Engineering Plant Cost Index
The index is employed primary as a process plant construction index, was established using a base period of 1957-1959 as 100.
Chemical Engineering Plant Cost Index
It is updated monthly and it lags in time by about 3 months.
Chemical Engineering Plant Cost Index
It was revised in 1982, to account for changes in labor productivity and again, in 2002. Published in each issue of chemical engineering.
Chemical Engineering Plant Cost Index
Used for similar equipment with different capacities.
Formula for equipment cost as a function of capacity
If equipment cost is a function of capacity, how can equipment cost is solved?
Equipment A cost is equal to the product of equipment B’s cost multiplied by X to the power of n.
Where X is the relative capacities of Equipment A and B (Capacity of Equipment A over Capacity of Equipment B)
n is the cost-capacity index or exponent, empirical data. Use the 6/10 rule if no data.
It is the total cost of building a facility.
Fixed Capital Investment (FCI)
