is the design of equipment or the

selection of operation conditions whereby decreasing the

costs to give the greatest economic return.

Economic balance are used in design, in operation,

in calculation of recovery of minerals, in yields for
chemical reactions, etc.
 In almost every case encountered by a chemical engineer,
there are several alternative methods which can be used for
any given process or operation.
: Formaldehyde can be produced
by catalytic dehydrogenation of methanol or by direct
reaction between CO and H , under special conditions of
catalyst , temperature, and pressure. Each of these processes
contains many possible alternatives involving variables such
as gas-mixture composition, temperature, pressure and
choice of catalyst . It is the responsibility of the chemical
engineer, in this case, to choose the best process and to
incorporate into the design the equipment and methods
which will give the best results.
 If there are two or more methods for obtaining
exactly equivalent final results, the preferred method would
be the one involving the least total cost. This is the basis of
an

1) DETERMINING THE PIPE DIAMETER .

2) OPTIMUM THICKNESS FOR INSULATION .
 When the fluid is pumped from one point to another
the same final result can be accomplished by using an
infinite number of different pipe diameters. However, an
economic balance will show that one particular pipe
diameter gives the least total cost .

Where,
is recurring expenses .
Example : Cost of raw materials , Labor
is indirect plant expenses.
Example : Lease and rental payments , Insurance .
 As shown in this figure, the pumping cost increases
with decreased size of pipe diameter because of frictional
effects, while the fixed charges for the pipeline become
lower when smaller pipe diameters are used because of the
reduced capital investment.
The optimum economic diameter is located where the
sum of the pumping costs and fixed costs for the pipeline
becomes a minimum, since this represents the point of least
total cost. In the figure , this point is represented by E .
 There are two methods for determining the
optimum thickness for insulation .
 For the simple case in which all expenses are expressed
as functions of a single variable,
 The total expense equation can be differentiated
with respect to the single variable, the result set equal to
zero and the equation solved for the optimum .
Total annual expenses = fixed expenses + variable expenses

The value of x is either a maximum or minimum, depending on the

problem objective.
 It is a quick method.

Does not afford ready comprehension of how

different cost elements vary with size.
Final answer does not yield standard sizes.
Does not indicate how sharp the maximum or
minimum curve is at the optimum.
May result in an equation that is difficult to solve
mathematically
  For a reasonable range of sizes, the fixed and variable
expenses in the total expense equation are calculated and tabulated.
 For piping and insulation, discrete commercial sizes
are selected.
 The optimum is found by plotting the fixed expenses,
variable expenses, and the total expense curves as a function of the
controllable variable.
 If the curve has a sharp minimum, the indicated size is
correct; however, if the total expense curve is relatively flat, there is
some latitude in the choice.
 For instance, if the proposed investment is to be a
minimum, the smaller equipment size is selected, whereas, if a
margin for increased capacity is desirable, then a larger size might
be selected provided that there is not a significant increase in the
total annual expenses.
 1 ) Yields an answer for available or approximate sizes
that will provide the desired service at minimum cost or will
provide maximum yield.
2 ) Produces a solution where the analytical method
may be difficult or impossible to solve.
3 ) Indicates pictorially how the fixed, variable and total
annual expenses vary with size.

1 ) Takes more time to solve .

  The chemical engineer often selects a final design
on the basis of conditions giving the least total cost.
 It then becomes necessary to consider the quality
of the product or the operation as well as the total cost.
 When the engineer speaks of economic balance,
it ordinarily means the cheapest one selected from a
number of equivalent designs.
 An engineering cost analysis can be used to find
either a minimum total cost or a maximum benefit.
 Such a cost analysis is frequently called an
economic balance because it involves the balancing of
economic factors to determine an optimum design or
optimum operating conditions.