Engineering Economics and Economic Design for Process Engineers  book cover
1st Edition

Engineering Economics and Economic Design for Process Engineers

ISBN 9780849382123
Published October 27, 2006 by CRC Press
368 Pages 79 B/W Illustrations

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Book Description

Engineers often find themselves tasked with the difficult challenge of developing a design that is both technically and economically feasible. A sharply focused, how-to book, Engineering Economics and Economic Design for Process Engineers provides the tools and methods to resolve design and economic issues. It helps you integrate technical and economic decision making, creating more profit and growth for your organization. The book puts methods that are simple, fast, and inexpensive within easy reach.

Author Thane Brown sets the stage by explaining the engineer’s role in the creation of economically feasible projects. He discusses the basic economics of projects — how they are funded, what kinds of investments they require, how revenues, expenses, profits, and risks are interrelated, and how cash flows into and out of a company. In the engineering economics section of the book, Brown covers topics such as present and future values, annuities, interest rates, inflation, and inflation indices. He details how to create order-of-magnitude and study grade estimates for the investments in a project and how to make study grade production cost estimates.

Against this backdrop, Brown explores a unique scheme for producing an Economic Design. He demonstrates how using the Economic Design Model brings increased economic thinking and rigor into the early parts of design, the time in a project’s life when its cost structure is being set and when the engineer’s impact on profit is greatest. The model emphasizes three powerful new tools that help you create a comprehensive design option list. When the model is used early in a project, it can drastically lower both capital and production costs.

The book’s uniquely industrial focus presents topics as they would happen in a real work situation. It shows you how to combine technical and economic decision making to create economically optimum designs and increase your impact on profit and growth, and, therefore, your importance to your organization. Using these time-tested techniques, you can design processes that cost less to build and operate, and improve your company’s profit.

Table of Contents

Engineering Economics

The Economic Side of Engineering

The Engineer’s Role in Profit Creation
Economic Viability
Project Authorization
Types of Projects
Investments, Revenues, Expenses, and Profit
Economic Work After Funding
Corporate Cash Flow
Problems and Exercises

Time Value of Money

Cash Flow Diagrams
Present Worth, Future Worth, and Annuities
Before- and After-Tax Considerations
Inflation and Indices
Problems and Exercises
Additional Topic: Compounding Other Than Annually
Problems and Exercises

Estimating Investments

Capital Costs Defined
Estimating Capital
Estimating the Other Investments
Additional Topic: Types of Estimates

Estimating Production Cost

Production Costs Defined
Fixed and Variable Costs
Estimating Methods
Problems and Exercises
Additional Topic: Product Cost and General Expense

Economic Evaluation Methods

Evaluation Methods
Other Methods
Analysis of Risk
Problems and Exercises
Additional Topics: Creating Guidelines for Rapid ROI Calculation
What To Use Constant Dollars Or Actual Dollars

Economic Design

Economic Design: A Model
Defining Economic Design
The Economic Design Model

Defining Objectives

Why Define Objectives?
What Do Good Objectives Look Like?
An Example
Project objectives
How to Get Input from the Key Stakeholders (and Ensure it Is Correct)
Problems and Exercises
Creating Options: Flow Sheet Development.
Design (or Project) Phases
Flowsheet Development
Problems and Exercises
Additional Topic: Types of Flowsheets

Creating Options: Creating the List

General Methods
Process Development Methods
Feasibility and Conceptual Engineering
Problems and Exercises

Option/Alternate Analysis

Technical Feasibility Comes First
Economic Analysis Methodology
The Economics of Selecting Equipment
The Economics of Plant Siting
Problems and Exercises
Additional Topic: How to Decide Whether to Install Capacity for an Assumed Future Need

Economic Design Case Studies

Optimal Cooling Water Temperature in a Cooler
Optimal Catalyst Usage in a Reactor/Filter System
Optimal Heat Recovery in a Heat Exchanger Loop
What to Choose: A Grass-Roots Plant or the Expansion of an Existing Plant
Optimum Number of Plants
Appendix I Definitions
Appendix II Indices
Appendix III Compound Interest Tables
Appendix IV Equipment Pricing Data
Appendix V Design Phases: Inputs and Outputs Index

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