1. Manajemen Industri Instructor: Rama Oktavian
16/17 Semester 5
Manajemen Industri
Instructor: Rama Oktavian
Office Hr.: M.10-15, Tu , W , Th , F

2. Engineering economics
Cost estimation
A company that manufactures a product has funds invested in land, buildings, and equipment.

3. Engineering economics
Cost estimation
Capital cost
Capital cost pertains to the costs associated with construction of a new plant or modification to an existing chemical manufacturing plant.

4. Engineering economics
Cost estimation
Capital cost
Total capital investment includes funds required to purchase land, design, purchase, and install equipment and buildings, as well as to bring the facility into operation

5. Engineering economics
Cost estimation
Capital cost

6. Engineering economics
Cost estimation
Capital cost

7. Engineering economics
Cost estimation
Capital cost

8. Engineering economics
Types of capital cost estimate
1. Order of Magnitude Estimate (Feasibility)
2. Study Estimate / Major Equipment
3. Preliminary Design (Scope) Estimate
4. Definitive (Project Control) Estimate
5. Detailed (Firm or Contractors) Estimate

9. Engineering economics
Capital Cost Estimate Classifications
Estimate Type
Accuracy
Data
Diagrams
Notes
Order of Magnitude
+ 25%, - 15%
Existing plants
BFD
Capacity + inflation
Study (Major equipment, Factored)
+ 30%, - 20%
Roughly sized major equipment
PFD
Generalized charts cost
Preliminary Design (scope)
major equip. + piping + instr. + Elec. + util.
Group project
Definitive
+ 15%, - 7%
Prelim spcs for all equipment
PFD + P&ID
Detailed (firm or contractor
+ 6%, - 4%
Complete engineering

10. Engineering economics
Capital Cost Estimate Classifications

11. Engineering economics
Capital Cost Estimate Classifications

12. Engineering economics
Capital Cost Estimate Classifications

13. Engineering economics
Capital Cost Estimate Classifications

14. Engineering economics
Capital Cost Estimate Classifications

15. Engineering economics
Order of magnitude estimate
Turnover Ratio

16. Engineering economics
Order of magnitude estimate
Turnover Ratio

17. Engineering economics
Order of magnitude estimate
Fixed Investment per Annual Ton of Capacity

18. Engineering economics
Order of magnitude estimate
Fixed Investment per Annual Ton of Capacity

19. Engineering economics
Order of magnitude estimate
Seven-Tenths Rule

20. Engineering economics
Order of magnitude estimate
Seven-Tenths Rule

21. Engineering economics
Order of magnitude estimate
Seven-Tenths Rule

22. Engineering economics
Study estimate
Lang method

23. Engineering economics
Study estimate
Lang method

24. Engineering economics
Study estimate
Lang method

25. Engineering economics
Study estimate
Hand method

26. Engineering economics
Study estimate
Hand method

27. Engineering economics
Study estimate
Hand method

28. Engineering economics
Equipment cost data
Cost data :purchased, delivered, or installed costs
Purchased cost is the price of the equipment FOB (free on board) at the manufacturer’s plant
Delivered cost is the price of the equipment plus delivery charges to the purchaser’s plant FOB
installed cost means the equipment item, for instance, a centrifugal pump has been purchased, delivered, uncrated, and placed on a foundation in an operating department but does not include piping, electrical, insulation costs
Equipment cost data are correlated as a function of equipment parameters

29. Engineering economics
Equipment cost data

30. Engineering economics
Equipment cost data

31. Engineering economics
Equipment cost data

32. Engineering economics
Equipment cost data

33. Engineering economics
Equipment cost data

34. Engineering economics
Equipment cost data

35. Engineering economics
Equipment cost data
Cost index

36. Engineering economics
Equipment cost data
Cost index

37. Engineering economics
Equipment cost data
Cost index

38. Engineering economics
Estimation of fixed capital investment

39. Engineering economics
Estimation of fixed capital investment

40. Engineering economics
Estimation of fixed capital investment

41. Engineering economics
Estimation of fixed capital investment

42. Engineering economics
Estimation of fixed capital investment

43. Engineering economics
Estimation of fixed capital investment

44. Engineering economics
Estimation of fixed capital investment

45. Engineering economics
Estimation of fixed capital investment

46. Engineering economics
Estimation of fixed capital investment

47. Engineering economics
Estimation of fixed capital investment

48. Engineering economics
Estimation of fixed capital investment

49. Engineering economics
Estimation of working capital investment

50. Engineering economics
Estimation of working capital investment

51. Engineering economics
Estimation of working capital investment

52. Thank You !