Estimation of production cost and revenue

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Contents

Variable Cost of Production

Estimating Variable Production Costs

Raw Materials Cost

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

Utilities Cost

Consumables Cost

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

Maintenance Costs

Land, Rent, Taxes

Insurance

Interest Payments

Corporate Overhead

Licensing and Royalties

Revenues

By-Product Revenues

Margin

Profits

Pricing Products and Raw Materials

Pricing Fundamentals

Price data Sources

Internal Company Forecasts

Trade Journals

Consultants

Online Brokers and Suppliers

Reference Books

Price Forecasting

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.