241
(1916)1
i?ngineeringand PImess Economics 1 24 - 243 0 ElsevierScientificPublishingCompany,Amsterdam-
Printedin The
Netherlands
BOOK REVIEWS --
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The Principles and Techniques of Engineering Estimating; by Granvilfe Calder, published by Pergatnon Press 1976, 167 pages, price & 5.00. Books in this field relating to U.K. conditions and practice are few and far between, the majority of those on this subject in the english language being orientated almost exclusively to U.S. conditions. So this book is indeed welcome, even although, in view of its size, the treatment is never in depth. The book attempts to cover and follow through ail forms of engineering estimating within a v3ry small compass. It deals with four main areas: machine shop estimating, including mass production techniques: capital cost estimating: research and development estimating: and finally technological forecasting. It also deals briefly with investment appraisal. All the emphasis is on machine shop estimating, the treatment of capital cost estimating being at best superficial.
Process Plant Estimating fvatwtion and Control; by Kenneth M. Guthrie, published by the Craftsman Book Co. (U.S.A ), 1974, price $25. At first glance this book seems to fulfill all its author promises by way of comprehensive theoretical and numerical cost data. It is full of charts and diagrams which should satisfy the costing requirements of a large majority of chemical engineers. However, when attempting to use the book for an actual costing exercise it quickly becomes clear that It has inconsistencies of terminology and confusing presentation that make it difficult to use with
--__The role of the estimating function within the management structure is demonstrated and its importance and influence is outlined. The need for management to understand both the value and the limitations of the estimating functioil is continually stressed. As we are in., deed warned by its title, the book covers principles and techniques, and does not provide any detailed costs, or costing data, except to a minor extent for illustrative purposes. It is m no sense, therefore, a textbook, but can well serve as a useful introduction to a subject with which many more, particularly in the management field, should be familiar than is the case at present. The easy, friendly style of writing should encourage the uninitiated to delve deepel than perhaps they normally would in a subject which is very much the preserve of the specialist E.A. Stallworthy
any confidence. The author does not quote any sourzes of his information, theoretical or practical, so it has to be assessed as a ver.1 personal book, the result, no doubt, of many years of experience. The book has 600 A4 sized pages divided into eleven sections each attempting to examine a specific area of costing or evaluation theory osr practice. A. The economic environment. This section discusses evaluation of capital projects by the standard techniques of payback time, NPV, DCF and so on. The author includes an unconventional year “-1” before the capita1 investment year “0” in his cash flow diagrams with-
242 out explaming its significance. There also stems to be some confusion between design production capacity in relation to capital cost and operating capacity in relation to Operating cost in the discussion of breakeven level. ‘There follow some 80 pages of graphs and tables showing “total capital investment” in terms of plant capacity for a range of 60 processes. The costs tk roughout the book are normalised to mid 1970 average U.S. values. The plants included are mostly petrochemical and aknost entirely liquid or liquid/gas handlmg and no indication is given as to the source of the information. Th; terms used are not defined and there is some confusion about what each means, for instance, it is not clear whether “process units” are the same as “purchasec equipment” or whether “total capital investment” has the same meaning throughout the book and is the same as, for example “total module cost”. All the terms need to be defined and consistent in such a text and a numerical example of how to use the cost data would be a very valuable addition. Graphs of operating costs for the 60 processes are next included but are quoted in dollars per “unit” and the “unit” is not defined. There is also a brief discussion of plant overheads expenses including depreciation. Taxation is hardly mentioned. 8. Chemical process modules. This includes an explanation of much of the data presented in section A under “modules”! It provides data for assembling plant item costs from the item type, material of construction, and direct labour factor to produce a module cost. Data for various types of h*at exchangers, process vessels, pumps, and several other types of process unit, and details for most of the ancillaries are included, such as painting, insulation, control panels and electrical installatlon. C. Buildings and structures. These “civil engineering” costs are presented in the standard way by type, floor area or structure volume
and include separate cosis for building services such as lighting, heating, etc. D. Offsite facilities. These include steam and power generation, cooling, refrigeration and siorage costs which are presented in a similar way to Sections A and B with similar difficulties. E. Site development. These are, again, standard civil engineering type costs presented in straightforward tabular form. F. Project indirect costs. These include construction overheads, engineering costs and contingencies and are applied to all the types of process modules referred to in Section B. G. Pipe estimating handbook. This is a very valuable section of the book and includes data on capacity, weight and flow for standard American pipes and flanges from 1 inch to 30 inches diameter. There are viscosity and density charts for liquids and gases and from these are derived pressL*rcloss diagrams. The chapter ends with unit costs for pipework and pipe fittings including valves insulation, painting, tracing, etc. Sections H, J, and K are more theoretical sections of the book providing an introduction to various control techniques for projects. H. Project control techniques. This section has a brief discussion of cost control in which forecast performance is compared with actual performance to produce a new plan. There is also a mention of a “modular” control technique which seems to be a way of breaking down a large and long capital programme into manageable units. J. Computer cost management. This has a brief description of how a computer might be used for some of the processing involved in H. K. Uncertainty and risk. This section mentions standard statistical methods for probability assessment. L. General design data. This appendix contains comprehensive conversion tables - American and metric -and graphs for vessel volumes, weights, areas and pumping powers. Escalation indexes for 1963 - 1973 are presented for
plants and their components, and the effect of world location on costs for North and South America, Europe and Australia. This section, and the book, ends with suggested layouts for various types of costing forms. Nearly half the book is taken up with Sections A and B which are potentially a valuable addition to the published data on process plant costs. With the suggested definition of terms,
editing to maintain consistency and provision of examples this would be a most useful source of cost data for students and practising cngineers. The second half presenting standard non process costs and briefly describing costing theory is not so original. but is better prcscntcd and easily used. J.K. Maund
