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Factorial Method Cost Estimation

The Factorial Method of Cost Estimation provides a framework for estimating capital costs for chemical process plants based on major equipment costs and various cost factors. It utilizes Lang factors for quick estimates and detailed factorial estimates for accuracy by considering individual components and their associated costs. Additionally, it distinguishes between direct costs, such as equipment and installation, and indirect costs, including design and contingency fees.

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190 views7 pages

Factorial Method Cost Estimation

The Factorial Method of Cost Estimation provides a framework for estimating capital costs for chemical process plants based on major equipment costs and various cost factors. It utilizes Lang factors for quick estimates and detailed factorial estimates for accuracy by considering individual components and their associated costs. Additionally, it distinguishes between direct costs, such as equipment and installation, and indirect costs, including design and contingency fees.

Uploaded by

bakhtawarali589
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The Factorial Method of Cost

Estimation
Capital Cost Estimates for Chemical
Process Plants
Introduction
• Capital cost estimates are based on the
purchase cost of major equipment items.
Other costs are estimated as factors of the
equipment cost. Accuracy depends on design
stage and reliability of equipment cost data.
Lang Factors
• Fixed capital cost is estimated using the
equation: Cf = fL * Ce
• • Cf = Fixed capital cost
• • Ce = Total delivered cost of major equipment
• • fL = Lang factor, depends on process type:
• - 3.1 for solids processing
• - 4.7 for fluids processing
• - 3.6 for mixed fluids-solids processing
Detailed Factorial Estimates
• For more accuracy, cost factors are considered
individually for each component:
• • Equipment erection
• • Piping, Electrical, Instruments
• • Process buildings, Ancillary buildings
• • Utilities, Storages, Site development
Direct and Indirect Costs
• Direct Costs:
• • Equipment purchase and installation
• • Piping, electrical, instruments, buildings
• Indirect Costs:
• • Design and engineering (20-30% of direct
costs)
• • Contractor’s fees (5-10% of direct costs)
• • Contingency (5-10% of direct costs)
Cost Estimation Factors
• Typical cost factors for different processes:
• • Fluids Processing: Total = 3.40 * PCE
• • Mixed Fluids-Solids: Total = 3.15 * PCE
• • Solids Processing: Total = 2.80 * PCE
• • Fixed Capital = Total Physical Plant Cost *
1.45
Summary
• • Factorial method uses equipment cost to
estimate total capital cost
• • Lang factors provide quick estimates in early
design stages
• • Detailed estimates use individual cost
factors for accuracy
• • Indirect costs include design, contractor
fees, and contingency

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