W11_MFO_Present Economy Study For Selecting Fire Water Pump

  1. Problem Definition

In our project, we have plan to install electric fire water pump for the gas plant. We have received a complete offer with the specifications of the three brands of pumps. So in this blog, the author wants to try to compare the three brands of pumps using present economy study. Which pump has the most efficient cost?

  1. Identify the Possible Alternative

The following table contains data of three brand of pumps that will be selected.

Table 1. The pumps data

The pump will be operated 2,000 hours per year and 1 hp = 0.746 kW.

  1. Development Of the Outcome For Alternative

Before calculate the expense of the pumps, we must know the electric power costs per kWh. From the PLN website the electric power costs per kWh is Rp 1,467.28 as shown as table below.

Table 2. The electric power costs per kWh

The expense of electric power for the Brand A Pump is

(50 hp / 0.58)*(0.746 kW / hp)*(Rp 1,467.28/kWh)*(2,000 hours / year) = Rp 188,722,566

The expense of electric power for the Brand B Pump is

(50 hp / 0.65)*(0.746 kW / hp)*(Rp 1,467.28/kWh)*(2,000 hours / year) = Rp 168,398,597

The expense of electric power for the Brand C Pump is

(50 hp / 0.72)*(0.746 kW / hp)*(Rp 1,467.28/kWh)*(2,000 hours / year) = Rp 152,026,511

  1. Selection of criteria.

Pump selection criteria is pump that have the most efficient total cost of owning and operating

  1. Analysis and Comparison of Alternatives

The total cost of owning and operating the all pumps as shown as table below.

Table 3. The total cost of owning and operating the all pumps

From the table 3, Brand B have the most efficient total cost of owning and operating.

  1. Select of the preferred alternative

Base from above calculation, Brand B have the most efficient total cost of owning and operating. So, author will recommend the brand B for the gas plant.

  1. Performance Monitoring and Post Evaluation of Result

Monitoring should be conducted during execution of the project to ensure that all requirements are met.

References:

  1. Sullivan, W.G., Wicks, E. M., Koelling, C. P. (2014). Engineering Economy. Pearson. Sixteenth Edition.
  2. Tarif Dasar Listrik PLN Oktober 2017. Retrieved from http://listrik.org/pln/tarif-dasar-listrik-pln/
  3. Electric fire water pump specification & quotation Brand A
  4. Electric fire water pump specification & quotation Brand B
  5. Electric fire water pump specification & quotation Brand C