S07 Chap 6-5

S07 Chap 6-5 - Design Economics Lecture No.6-5 Chapter 6...

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Unformatted text preview: Design Economics Lecture No.6-5 Chapter 6 Contemporary Engineering Economics Copyright © 2006 • Concept : Total cost is given in terms of a specific design parameter • Goal : Find the optimal design parameter that will minimize the total cost • Typical Mathematical Equation : where x is common design parameter • Analytical Solution : A E i a b x c x ( ) = + + x c b * = Minimum Cost Analysis O & M Cost Capital Cost Total Cost Design Parameter ( x ) Optimal Value ( x *) Cost ($) Typical Graphical Relationship Power Plant Substation 1,000 ft. 5,000 amps 24 hours 365 days A copper conductor • Copper price: $8.25/lb • Resistance: 0.8145x10-5 Ω in 2 /ft • Cost of energy: $0.05/kwh • Density of copper: 555 lb/ft • Useful life: 25 years • Salvage value: $0.75/lb • Interest rate: 9% Example 6.10 Optimal Cross-Sectional Area • Energy loss in kilowatt-hour ( L ) Operating Cost (Energy Loss) L I R A T = 2 1000 L A A = × = 5 0 0 0 0 0 0 8 1 4 5 1 0 0 0 2 4 3 6 5...
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This note was uploaded on 12/06/2010 for the course IE 305 taught by Professor Wang during the Spring '08 term at Iowa State.

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S07 Chap 6-5 - Design Economics Lecture No.6-5 Chapter 6...

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