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Management
Framework:
T&+a# C&*+
Ma%age$e%+ * a
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Recommended Practice
Th* Rec&$$e%ded P)ac-ce ARPB * b)&/gh+ +& 3&/ a*
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In additon to this and other Recommended Practces,
here are just a sample of the products and services that
AACE has to oer you:
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Professional
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Recommended Practice
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Recommended Practice
Copyright 2011 AACE
O
C
P
Engineering C
E
=
E
(C
P
+ C
M
) = (1 +
M
)
E
C
P
Direct Field Labor Cost (DFL) = 0.25(DFC)
Indirect Field Cost (IFC) = 1.15(DFL)
Total Field Cost (TFC) = DFC + IFC
Home-Office Cost (HOC) = 0.3(DFC)
Other Project Cost (OTC) = 0.03(DFC) +0.15(TFC + HOC)
Total Project Cost (TPC) = OTC + TFC + HOC
where,
C
BM
= bare module cost of equipment (direct plus indirect costs)
C
P
= equipment cost in base case (carbon steel material at atmospheric pressure)
F
BM
= module factor (a factor that includes all direct and indirect costs)
C
M
= required material cost
C
FIT
= freight and insurance factor
M
= material factor
L
= labor factor
O
= overhead factor
E
= engineering factor
Each component of fixed capital investment can be considered as a factor of equipment cost. The
required material cost and the module factor are given in equations 4 and 5:
C
M
=
M
C
P
(equation 4)
F
BM
= (1+
M
)(
L
+
FIT
+
L
O
+
E
)
(equation 5)
The bare module cost includes the direct and indirect cost only and doesn't include contingency and
auxiliary services costs. For example, if the cost of a heat exchanger in a base case (with carbon steel
material and operating at ambient pressure) equals to $10,000 then for (
M
= 0.7,
L
= 0.37,
FIT
= 0.08,
0
= 0.7,
E
= 0.15) the bare module cost equals to $14,603. The equipment cost in a non-base case is
shown in equations 6 and 7:
F
BM0
= B
1
+ B
2
F
P
F
M
(equation 6)
C
BM0
= C
P
F
BM0
(equation 7)
where
F
BM0
= module factor for non-base case;
F
P
= correction factor for pressure;
F
M
= correction factor for material.
B
1
and B
2
are calculated on the basis of fixed investment components, which obtained for different
equipments in specified ranges. The equipment cost (C
P
) is obtained by parametric models with a cost
relation shown in equation 8:
log
10
(C
P
) = K
1
+ K
2
log
10
(A) + K
3
log
10
(A)
2
where A is a key parameter of equipment.
(equation 8)
December 28, 2011
Copyright 2011 AACE
)
Y
I
_
n
I=1
where Y