Case Study, Upgrade of the mixing plant (PART 5)

Case Study, Upgrade of the mixing plant
Case Study, Upgrade of the mixing plant (PART 4)
29 July 2022

Cost Analysis

 

Cost-Benefit Analysis measures the financial impact of the project. With the tank farm it shall be an in-house plant upgrading because it will be developed by company personnel, using the company equipment, hardware, and software only a few items will be purchased.

Interpretation of the Cost-Benefit Analysis

  • Development costs

Development costs are incurred only once at the time the system is developed. i.e., they can be estimated from the onset of a project and should be refined at the end of each phase of the project. These development costs include:

PLC Hardware and software, computer software and hardware, purchase of installation equipment, personnel Costs (Overtime during development) and training.

  • Operational Costs

These tend to occur throughout the lifetime of the system, e.g., system maintenance costs, salaries, data backups and can be classified as fixed and variable costs.

Variable costs: occur in some proportion to some usage factor such as printer paper ink and prorata overhead cost.

Fixed Costs: occur at regular intervals but are relatively at fixed rates e.g., software license payment and prorated salaries of support personnel.

 

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