Process Design, Simulation and Economics
What the exam tests
Flowsheet synthesis and pinch analysis, equipment sizing, capital and operating cost estimation, profitability measures (NPV, IRR, payback) and simulation practice - convergence, tear streams and property-package selection.
Core rules
- Six-tenths rule: C₂ = C₁(S₂/S₁)^n with n ≈ 0.6; escalate with a cost index, C_now = C_then(I_now/I_then).
- Lang factors: installed cost ≈ f_L × purchased equipment cost, with f_L around 3–5 depending on plant type.
- Working capital is typically 10–20% of fixed capital and must be included in total capital investment.
- Depreciation is non-cash; tax applies to revenue minus operating cost minus depreciation.
- NPV = ΣCF_t/(1+i)^t; IRR is the rate where NPV = 0; accept projects with positive NPV at the hurdle rate.
- Pinch analysis sets minimum hot and cold utility targets; never transfer heat across the pinch.
Worked example
A 100 t/d unit cost USD 500,000 when the CEPCI was 600; the index is now 780 and the new capacity is 400 t/d. Scaled cost = 500,000 × (400/100)^0.6 = 500,000 × 4^0.6 = 500,000 × 2.297 = 1,148,000. Indexed cost = 1,148,000 × (780/600) = 1,493,000. That is a screening-grade estimate (roughly ±30%) suitable for concept selection, not for a funding decision.
Traps
- Inverting the capacity ratio in the six-tenths rule.
- Forgetting escalation, or double counting contingency on top of an already-installed cost.
- Comparing projects of different lives without an equivalent annual cost basis.
- Selecting a property package that cannot represent the chemistry (ideal gas for an associating polar system).
- Recycle loops that fail to converge because tear-stream estimates are inconsistent with the overall balance.