Prior to performing economic calculations for a new project, some economic information must be first specified. Generally, the economic information considered in the calculations can be classified into the following categories:
1. Material-related information. This includes the different unit costs (e.g., purchase price, selling price, waste treatment/disposal cost) of pure components and stock mixtures.
2. Stream-related information. This includes the classification of input and output streams into different categories (e.g., raw materials, revenues, wastes, etc.).
3. Operation-Related information. This includes the unit costs of labor and utilities (heat transfer agents and power) for each operation.
4. Equipment-related information. This includes the capital and operating costs for each equipment (e.g., purchase cost, installation, maintenance, consumables, etc).
5. Section-Related information. This includes cost factors that are used to determine the capital and operating costs for each process section.
6. Process-related information. This includes economic evaluation parameters that are specified at the process level, such as time valuation, financing, production level and additional operating cost information for the entire project.
A key step in the economic calculations is the classification of streams into different categories and the specification of the costs associated with these streams. Each new stream added to a process flowsheet is initially unclassified. Therefore, the specification of stream classification information must precede the economic evaluation calculations. These can be specified through the Stream Classification Dialog which can be displayed by clicking Stream Classification on the Tasks menu.
Another important step in the calculations is the specification of the unit purchase cost, selling cost, and treatment or disposal cost of registered pure components and stock mixtures in a project. Default values are provided for a number of materials but some materials may have zero or outdated values. Similarly, default cost data and calculation options are provided for the bottom four economic information categories (e.g., unit costs of labor, power and consumables, equipment purchase cost, capital and operating cost factors with respect to purchase cost, information regarding time valuation, financing and production level, etc.). However, the default parameters may not be suitable for a particular project. Therefore, you are advised to examine the default economic parameters that are used in a project and make suitable changes where needed.
The economic calculations are performed by clicking Perform Economic Calculations (
) on the Main toolbar or on the Tasks menu. Note that the calculations of capital expenses, operating cost, income and profits are done around process sections. It is important to divide your process into a number of sections and take advantage of the cost breakdowns that pinpoint the cost-sensitive areas (the economic “hot-spots”) of a complex process.
The key analysis results are summarized in the ‘Executive Summary for Project’ dialog. To access this dialog, click Executive Summary on the View menu. In addition, the following reports can be generated:
● Economic Evaluation Report (EER): this report includes an executive summary that presents the key analysis results, a breakdown of the total capital cost, a breakdown of the annual operating cost and a description of profitability analysis calculations. To generate this report, click Economic Evaluation (EER) on the Reports menu.
● Cash Flow Analysis Report (CFR): This report includes loan information and detailed breakdowns of capital outlay, loan payment and cash flow for each year over the expected lifetime of a project. To generate this report, click Cash Flow Analysis (CFR) on the Reports menu.
● Itemized Cost Report (ICR): this report contains detailed cost breakdowns of the annual operating cost of all sections. This includes all cost items that are calculated at the section level. Additional cost items that are calculated at the process level are not considered. To generate this report, click Itemized Cost (ICR) on the Reports menu.