01st Feb

Engineered cost models VS Traditional cost models

What are engineered cost models?

Our engineered cost model aims at the pricing of an equipment but also ensures the design costing approach. Indeed, the purpose of cost models is not to design equipment but understanding and having a basic design overview would considerably improve the accuracy during early-stage estimating.

How are engineered cost models different from traditional cost models?

In a traditional sense, cost models have been built using parametric equations and they have always been limited by the data availability and how well they statistically align. In addition to this traditional cost models do not verify if the combination of values entered for a certain parameter (for example, temperature) makes sense realistically for the other set of variables (material of construction, pressure) chosen.

Engineered cost models are smarter in this aspect that based on the design standard chosen, the applicable material properties are obtained and there is a check if the chosen variables are realistically possible. This also ensures that the cost models are sound also from a design perspective.

For example, in a traditional cost model, the temperature limits for a pressure vessel would be based on the data availability, statistical alignment as well as reliability. But in case of the engineered cost models, temperature limits are based on the material properties at a given temperature. Thus, the limits are dynamically set based on the choices made. A similar design-based logic also applies in limiting allowable pressure and other variables. This also acts as a check on the process parameters against the equipment material chosen.

Main industry standards

The available standards are varying based on the type of equipment. For this case, we focus on the static equipment, ASME and EN are the two main industry standards being used. Both standards have their own criteria for various material property testing (tensile strength testing at different temperatures, hardness testing, impact testing, etc.,) as well as specific equipment design and testing criteria. Thus, based on the design standard chosen there can be considerable design variation, and thus as a result, the cost varies as well.

Conclusion

Engineered cost models are certainly a step in the right direction for cost calculation models. Not only do they consider the feasibility of the combinations of various properties of the material but also the design requirements for certain equipment. Indeed, proper design of equipment considering all the factors would be essential for a detailed design but for early-stage estimating, just based on process conditions a reliable estimate of the costs can be obtained. Thus, adding a bit of engineering knowledge to the traditional cost models can help in improving your equipment estimate’s accuracy.

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