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Engineering Cost & Estimation

The document discusses different types of cost estimates for engineering projects: - Order of magnitude estimates have an accuracy of over 30% and extrapolate costs from similar plants. - Study estimates have an accuracy of ±30% and involve knowledge of major equipment. - Preliminary estimates have an accuracy of ±20% and are enough for budget authorization. - Definitive estimates have an accuracy of ±10% and are based on basic engineering and supplier quotes. - Detailed estimates have the highest accuracy of ±5% as they are based on completed detailed engineering.

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33 views

Engineering Cost & Estimation

The document discusses different types of cost estimates for engineering projects: - Order of magnitude estimates have an accuracy of over 30% and extrapolate costs from similar plants. - Study estimates have an accuracy of ±30% and involve knowledge of major equipment. - Preliminary estimates have an accuracy of ±20% and are enough for budget authorization. - Definitive estimates have an accuracy of ±10% and are based on basic engineering and supplier quotes. - Detailed estimates have the highest accuracy of ±5% as they are based on completed detailed engineering.

Uploaded by

abc
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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DUMKAL INSTITUTE OF

ENGINEERING &
TECHNOLOGY
Subject Name – Economics For Engineers
Subject Code – HM-HU701
Topic Name – Engineering Cost & Estimation – An Overview
Name – HASIM ABDUL HALIM
Roll No – 13100719052
COST ESTIMATION
• Fixed Capital Investment: Cost of equipment and facilities
FCI = (Direct Costs) + (Indirect Costs)
• Direct Costs:
• 1. Purchased equipment: Columns, Heat Exchangers, pumps, tanks, etc.
• 2. Equipment Installation
• 3. Piping (includes insulation)
• 4. Instruments and Control
• 5. Electrical Equipment.
• 6. Buildings: Process, Administration, Maintenance shops, etc.
• 7. Site Preparation
• 8. Service Facilities: steam, water, air, fuel, etc. Waste treatment, fire control, offices, etc.
• 9. Land
Indirect Cost:
1. Engineering and Supervision: Administrative and Design.
Supervision and Inspection.
2. Construction Expenses
3. Contractor's fee
4. Contingency.
5. Start up expenses
Types Of Cost Estimates
1. Order of Magnitude estimate. Extrapolate similar plant cost Accuracy:
over 30%
2. Study Estimate. Knowledge of major pieces of equipment Accuracy: ±
30%
3. Preliminary Estimate. Enough for budget authorization. Accuracy: ±
20%
4. Definitive Estimate. Based on basic Engineering and quotes from
suppliers and contractors. Accuracy: ± 10%
5. Detailed Estimate.Based on Detailed Engineering. Accuracy: ± 5%
Cost Indexing
• Engineering News-Record Construction Cost index. Steel, lumber,
labor, concrete. Published in “Engineering News-record”. ENR value
reported based on 100 in 1913, 1949 or 1967.
• Nelson-Farrar Refinery Construction Cost index. Skilled and common
labor, iron and steel, building materials, miscellaneous equipment.
Published in “Oil and Gas Journal”. N-R value of 100 in 1946.
• Chemical Engineering Plant Cost Index. Chemical Plants. Equipment,
machinery Engineering and supervision supports 61% 10% Installation
labor 22% Buildings, material, labor 7% Published in “Chemical
Engineering”. PCI value of 100 in 1957-59
Fixed Capital Investment

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