W6_HERU_ Power Sizing Material Pump

1.      Problem recognition, definition and evaluation

Material purchase plan at Pertamina fire pump with a capacity of 300 gpm. For completeness required tender price estimate the required capacity but documents in the database rates a mention that no specification is needed, there is a smaller capacity of 200 gpm procurement of material in 2009.

2.      Development of the feasible alternative

Meet the price reference data have been made to several manufacturing and sourcing have not gotten a reply fax or email while material procurement requirements should be implemented as soon as possible. There are several options that should be taken by the management to assign employees :

1. Come to fabricate gas company asking price
2. make estimated price with existing data.

Table 1. Pump price list

No	Description	Price (USD)	Remarks
1	Pump cap. 250 gpm	200,000	Tahun 2009
2	Pump cap. 200 gpm	180,000	Tahun 2008
3	Requirement pump cap. 300 gpm	?	Tahun 2013

                             

4.      Selection of criteria

To select items one would require time so it does not allow for the purchase of an urgent nature. So mangement select an item number 2 Which was the estimate could be accounted for, and the purchase of materials can be realized as soon as possible.

5.      Analysis

In calculating the estimated purchase price of the material there are several stages of :

1. Power sizing technique

Ca/Cb = (Sa/Sb)^x

Where :

Ca = cost for plant a

Cb = cost for plant b

Sa = size of plant a

Sb = size of plant b

x = cost capacity factor between 0,68 for nuclear generating plants and 0,79 for fossil-fuel generating plants

2. Escalation index

Cn = Ck (In/Ik)

Where :

k  = reference year for which cost or price of item is known

n  = year for which cost or price is to be estimated (n >k)

Cn = estimated cost or price of item in year n.

Ck = cost or price of item in reference year k.

Simulation with powewr sizing technique

Ca/Cb = (Sa/Sb)^x

200,000/Cb = (200/300)^0,79

0,73Cb = USD. 200,000,-

Cb = USD. 273,972,- (unit price in year 2009)

Simulation with escalation index

Cn = Ck (In/Ik)

Cn = USD. 273,972 (1.412)

Cn = USD. 386,848,-

Obtained the price to pump 300 gpm is equal USD. 386,8484,-

6.      Selection of alternative

The calculation is used as an estimate of the price and the bid price basis.

7.      Performance monitoring and post-evaluation of results

Finally purchase requirement materail pump as urgency Pertamina refinery needs to operate more quickly than if we choose a price with a higher level of accuracy that will take a long time. With this method of sizing power and escalation index that can be accounted for. 

References:

·         William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling (2011), Engineering Economy (15^th Edition), Chapter 3

W12_DI_2013 TANKER OPERATING COST ESTIMATION

1.       Problem recognition, definition and evaluation

At the end of 2012 we were preparing 2013 budget for tanker vessels, in order to support operational preparation for next year. Tanker budget consist of several components such as bunker cost, charter cost, operating cost, port expenses, risk mitigation cost and depreciation.  As a Ship Owner & Ship Manager our main concert for budgeting is operating cost. This blog talk about tanker operating cost estimation using WBS and some model base on chapter 3 Engineering Economy books.

2.       Development of the feasible alternatives

Estimation calculation will compare using some parameters that is Drewry Operating Cost Index, Indonesian inflation index and linear regression from last 4 years OPEX realization.

3.       Development of the outcomes

Cost component using WBS for Tanker Operating Cost as shown below:

Figure 1: WBS Tanker OPEX

Parameters used for Cost Estimation Calculating:  

Drewry Operating Cost Index

Figure 2: Drewry operating cost index

 

Base on figure 2, obtained index from 2009 until 2013 as follow:

Indonesia Inflation Index

Figure 3: Indonesia Inflation Index

Mean data from 2009 – 2012 Indonesia inflation rate is 5.

4.       Selection criteria.

The best estimating budget will determine base on highest result from 3 parameter result as long as the result lower than internal standard charter rate similar vessels and International standard.

5.       Analysis and comparison of the alternatives

Calculation examples for Tanker 30,000 DWT (Type MR) with YOB 2005 and cargo white oil:

 

6.       Selection of the preferred alternative

Base on calculation above, shown that using Indonesia Inflation Index (mean 5%) is the highest result with 4,676 USD/day. Otherwise in internal rate for MR is 6500 – 8000 USD/day and data international standard from Drewry is 8,440 USD/day. 

7.       Performance Monitoring & Post Evaluation of Result

The result of 3 parameter above are regular vessel MR type operating cost exclude docking, damage, deductable and special repair. So the budget will increase if Ship Manager has plans to upgrade/improve vessels technically. Usually Ship Owner increase Ship manager budget around 10%-20%.

Drewry Index seems the lowest ones because Drewry standard base on International tanker market which is sensitive with global economic condition, global conflict and force major condition. Crisis in Middle East and global crisis in some Country make tankers market fall and operating cost index going down from 2011.

Reference: 

         i.      Maritime Research, Drewry. (2012). Ship Operating Costs Annual Review and Forecast (annual report 2012/2013),  Section 3 Operating Cost Oil Tanker.

       ii.      Indonesia Inflation Rate, retrieved from: 

http://www.tradingeconomics.com/indonesia/inflation-cpi

      iii.      William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling (2011), Engineering Economy (15^th Edition), Chapter 3