Beruflich Dokumente
Kultur Dokumente
May 2020
Assignment 3
Name:
Sanjeev Nehru Jawahar Nehru
ID:
16001174
Submission Deadline:
23/6/2020
Course Coordinator:
Pn Zazilah Bt May
Problem 3-6
An electric power distributor charges residential customers $0.10 per kilowatt-hour (kWh). The
company advertises that “green power” is available in 150 kWh blocks for an additional $4 per
month. (Green power is generated from solar, wind power, and methane sources.) (3.3)
a. If a certain customer uses an average of 400 kWh per month and commits to one monthly 150
kWh block of green power, what is her annual power bill?
b. What is the average cost per kWh with green power during the year?
Solutions:
$19+$25 12 𝑀𝑜𝑛𝑡ℎ𝑠
= X = $528
𝑀𝑜𝑛𝑡ℎ 1𝑌𝑒𝑎𝑟
$528
=
400𝑘𝑊ℎ 𝑋 12 𝑀𝑜𝑛𝑡ℎ𝑠
There is an increase of $0.01(10 percent) from the standard cost per kilowatt-hr.
c) Green power although coming from a environmental friendly source cost more than
standard electricity due to the capital cost needed to be covered due to a completely new
infrastructure built and these money would be fed back to the electricity generators and the
providers of green power which invested in green technology involving solar, wind and
other renewable sources. The generation method is costly compared to the standard ones.
Problem 3-11
The purchase price of a natural gas-fired commercial boiler (capacity X) was $181,000 eight years
ago. Another boiler of the same basic design, except with capacity 1.42X, is currently being
considered for purchase. If it is purchased, some optional features presently costing $28,000 would
be added for your application. If the cost index was 162 for this type of equipment when the
capacity X boiler was purchased and is 221 now, and the applicable cost capacity factor is 0.8, what
is your estimate of the purchase price for the new boiler? (3.3, 3.4)
Solution
𝐼𝑛̅
𝐶𝑛 = 𝐶𝑘 ( )
𝐼𝑘̅
221
= ($181 000) ( ) = $ 246 919.75
162
𝑆𝐴 𝑋
𝐶𝐴 = 𝐶𝐵 ( )
𝑆𝐵
1.42𝑋 0.8
𝐶𝐴 = $ 246 919.75( )
𝑋
= $ 326 879.61
Total cost with optional safety features = $326,879.61 + $28,000 = $354, 879.61
Problem 3-21
The cost of building a supermarket is related to the total area of the building. Data for the last 10
supermarkets built for Regork, Inc., are shown in the
accompanying table.
a. Develop a CER for the construction of supermarkets. Use the CER to estimate the cost of
Regork’s next store, which has a planned area of 23,000 square feet. (3.4)
b. Compute the standard error and correlation coefficient for the CER developed in Part (a). (3.4)
Solution:
Option 1: Computation Based on The Below Formula
1,000,000
Y
0
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
X Variable 1
Y Predicted Y
Sub into equation: y= bo + b1x to form the CER relating the supermarket building cost to building
area(x):
Y(cost)= 50 631.15 + 51.498X
So the estimated cost for the 23000 ft2 is :
Y(cost)= 50 631.15 + 51.498X
= 50 631.15 + 51.50(23000)
= $ 1 235 131.15
Regression Statistics
Multiple R 0.97649641
R Square 0.953545239
Adjusted R Square 0.947738394
Standard Error 66780.64733
Observations 10
86 190
a. Estimate the b0 and b1 coefficients, and determine the linear regression equation to fit these
data.
c. If an order weighs 250 lb, how much should it cost to package and process it?
Solutions:
a)
Option 1: Computation Based on The Below Formula
Form Linear Equation: y= bo + b1x where n = 10
Option 2: By Using Excel Spreadsheet
Using Data Analysis method
Regression Statistics
Multiple R 0.991169678
R Square 0.982417331
Adjusted R Square 0.980219497
Standard Error 1.809876031
Observations 10
c)
Sub into equation: y= bo + b1x to form the CER relating the supermarket building cost to building
area(x):
Y(cost)= 31.81287+ 0.279X
= 31.81287+ 0.279(250lb)
= $101.56
Problem 3-27
Extended Learning Exercise. You have been asked to prepare a quick estimate of the construction
cost for a coal-fired electricity generating plant and facilities. A work breakdown structure (levels
one through three) is shown is Table P3-27. You have the following information available:
• A coal-fired generating plant twice the size of the one you are estimating was built in 1993. The
1993 boiler (1.2) and boiler support system (1.3) cost $110 million. The cost index for boilers was
110 in 1993, it is 492 in 2016. The cost capacity factor for similar boilers and support systems is
0.9. The 600-acre site is on property you already own, but improvements (1.1.1) and roads (1.1.2)
will cost $2,000 per acre, and railroads (1.1.3) will cost $3,000,000. Project integration (1.9) is
projected to cost 3% of all other construction costs.
• The security systems (1.5.4) are expected to cost $1,500 per acre, according to recent (2016)
construction of similar plants. All other support facilities and equipment (1.5) elements are to be
built by Viscount Engineering. Viscount Engineering has built the support facilities and equipment
elements for two similar generating plants. Their experience is expected to reduce labor
requirements substantially; a 90% learning curve can be assumed. Viscount built the support
facilities and equipment on their first job in 95,000 hours. For this project, Viscount’s labor will be
billed to you at $60 per hour. Viscount estimates that materials for the construction of the support
facilities and equipment elements (except 1.5.4) will cost you $15,000,000.
• The coal storage facility (1.4) for the coal-fired generating plant built in 1993 cost $5 million.
Although your plant is smaller, you require the same size coal storage facility as the 1993 plant.
You assume you can apply the cost index for similar boilers to the coal storage facility.
What is your estimated 2016 cost for building the coal-fired generating facility? Summarize your
calculations in a cost estimating worksheet, and state the assumptions you make
Solutions:
i) Factor Value for the Boiler and Support System (1.2 &1.3)
492
(1/2)0.9 = 2.3969
110
492
= 4.4727
110
iii) Labor time estimate for 3rd facility (1.5 except 1.5.4)
𝑍𝑢 = 𝐾(𝑈 𝑛 )
U =3 units involved
K= 95 000 hours
S= 0.9
n= log s/log 2 =
𝑍3 = 𝐾(𝑈 𝑛 )
= 95000( 3−0.512 )
= 80 389.82 hours