Engineering Economic Analysis

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46 ENGINEERINGCOSTS AND COST ESTIMATING

scale that are common in industrial plant and equipment costs. Consider the cost to build a

refinery.Would it cost twice as much to build the same facility with double the capacity? It is

unlikely. Thepower-sizing modeluses the exponent(x),called thepower-sizing exponent,

to reflect economies of scale in the size or capacity:

Cost of equipmentA

(

Size(capacity) of equipmentA

)

x

= (2-3)

Cost of equipmentB Size(capacity) ofB

wherexis the power-sizing exponent, costs ofAandBare at the same point in time (same

dollar basis), and size or capacity is in the same physical units for bothAandB.'

The power-sizing exponent(x)can be 1.0 (indicating a linear cost-versus-size/capacity

relationship) or greater than 1.0 (indicatingdiseconomiesof scale), but it is usually less

than 1.0 (indicating economies of scale). Generally the ratio should be less than 2, and it

should never exceed5.This model works best in a "middle" range-not very small or very

large size.

Exponent values for plants and equipment of many types may be found in several

sources, including industry reference books, research reports, and technical journals. Such

exponent values may be found inPerry's Chemical Engineers' Handbook, Plant Design

and Economics for Chemical Engineers, andPreliminary Plant Design in Chemical

Engineering.Table 2-1 gives power sizing exponent values for several types of industrial

facilities and equipment. The exponent given applies only to equipment within the size

range specified.

In Equation 2-3 equipment costs for bothAandBoccur at the same point in time. This

equation is useful for scaling equipment costs butnotfor updating those costs. When the

time of the desired cost estimate is different from the time in which the scaling occurs (per

Equation 2-3) cost indexes accomplish the time updating. Thus, in cases like Example 2-8

involving both scaling and updating, we use the power sizing model together with. cost

indexes.

TABLE2-1 Example Power-Sizing Exponent Values

Equipment/Facility

Blower, centrifugal

Compressor

Crystallizer, vacuum batch

Dryer, drum, single atmospheric

Fan, centrifugal

Filter, vacuum rotary drum

Lagoon, aerated

Motor

Reactor, 300 psi

Tank, atmospheric, horizontal

Size Range

Power-Sizing

Exponent

10,000-100,000 ft3fmin

200-2100 hp

500-7000 ft2

10-100 ft2

20,000-70,000 ft2fmin

10-1500 ft2

0.05-20 million gal/day

5-20 hp

100-1000 gal

100-40,000 gal

0.59

0.32

0.37

0.40

1.17

0.48

1.13

0.69

0.56

0.57