Question

1. As per Turton et al. (2009) in the general equation for determining the cost of manufacturing (COMd), COMd = 0.180FCI+2.73COL+1.23(CUT + CWT + CRM) (1) one of the terms is 0.180FCI, where FCI is the fixed capital investment of the plant. "This term is included to cover the interest payment on the loan for the plant." Is this statement true or false? Explain your answer. 2. Why is the number of operators per shift multiplied by approximately 4.5 to obtain the total number of operators required to run the plant? 3. What is a stream factor? 4. When estimating the cost of manufacturing (COMd) for a chemical process, the overall COMd may be estimated using only five individual costs. Lists these five costs. 5. Cooling water is priced on an energy basis: R/GJ. We usually assume the temperature rise to be 10°C. Does the cooling water cost change if the return temperature changes? Are there any limitations to the return temperature? Explain. 6. In Equation (1) above, the cost of raw materials, CRM, is multiplied by a factor of 1.23. The reason for this is that, in general, we expect that the estimated cost of raw materials will be about 20% low and we add a correction factor of 1.23 to adjust for this. Do you agree with this explanation? If you do not, give another reason for using the factor of 1.23. 7. In Equation (1) above, the cost of operating labour, COL, is multiplied by a factor of 2.73. One reason for this is that the value of COL includes only plant operators and not supervisory and clerical labour costs. Is this statement true or false? What other factors (if any) account for the multiplication factor of 2.73?

          1. As per Turton et al. (2009) in the general equation for determining the cost of manufacturing
(COMd),
COMd = 0.180FCI+2.73COL+1.23(CUT + CWT + CRM) (1)
one of the terms is 0.180FCI, where FCI is the fixed capital investment of the plant. "This term is
included to cover the interest payment on the loan for the plant." Is this statement true or false?
Explain your answer.
2. Why is the number of operators per shift multiplied by approximately 4.5 to obtain the total number
of operators required to run the plant?
3. What is a stream factor?
4. When estimating the cost of manufacturing (COMd) for a chemical process, the overall COMd may
be estimated using only five individual costs. Lists these five costs.
5. Cooling water is priced on an energy basis: R/GJ. We usually assume the temperature rise to be
10°C. Does the cooling water cost change if the return temperature changes? Are there any
limitations to the return temperature? Explain.
6. In Equation (1) above, the cost of raw materials, CRM, is multiplied by a factor of 1.23. The reason
for this is that, in general, we expect that the estimated cost of raw materials will be about 20% low
and we add a correction factor of 1.23 to adjust for this. Do you agree with this explanation? If you
do not, give another reason for using the factor of 1.23.
7. In Equation (1) above, the cost of operating labour, COL, is multiplied by a factor of 2.73. One reason
for this is that the value of COL includes only plant operators and not supervisory and clerical labour
costs. Is this statement true or false? What other factors (if any) account for the multiplication factor
of 2.73?

1. As per Turton et al. (2009) in the general equation for determining the cost of manufacturing
(COMd),
COMd = 0.180FCI+2.73COL+1.23(CUT + CWT + CRM) (1)
one of the terms is 0.180FCI, where FCI is the fixed capital investment of the plant. "This term is
included to cover the interest payment on the loan for the plant." Is this statement true or false?
Explain your answer.
2. Why is the number of operators per shift multiplied by approximately 4.5 to obtain the total number
of operators required to run the plant?
3. What is a stream factor?
4. When estimating the cost of manufacturing (COMd) for a chemical process, the overall COMd may
be estimated using only five individual costs. Lists these five costs.
5. Cooling water is priced on an energy basis: R/GJ. We usually assume the temperature rise to be
10°C. Does the cooling water cost change if the return temperature changes? Are there any
limitations to the return temperature? Explain.
6. In Equation (1) above, the cost of raw materials, CRM, is multiplied by a factor of 1.23. The reason
for this is that, in general, we expect that the estimated cost of raw materials will be about 20% low
and we add a correction factor of 1.23 to adjust for this. Do you agree with this explanation? If you
do not, give another reason for using the factor of 1.23.
7. In Equation (1) above, the cost of operating labour, COL, is multiplied by a factor of 2.73. One reason
for this is that the value of COL includes only plant operators and not supervisory and clerical labour
costs. Is this statement true or false? What other factors (if any) account for the multiplication factor
of 2.73?

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