Issue link: https://www.e-digitaleditions.com/i/1263839
18 / July 2020 powderbulk.com would be really important to con- sider in selecting the best one. Technology trade-off case study 2 Finally, we took the same case study but altered the material's properties from extremely abrasive to nonabrasive and hot tempera- ture to ambient temperature before running our estimates again. We did this alternative case study to further illustrate this article's main objective, which is to show that for every project, the technical advantages and disadvantages and CAPEX and OPEX estimates will be different and should be evaluated on a case-by-case basis. With the altered material prop- erties, the cost estimates for the approximately $2.5 million, while the pneumatic option's NPC was approximately $2.4 million, as shown in Figure 3. Over a 10-year period, the pneumatic option would cost $100,000 less than the mechan- ical option in current money value. A $100,000 cost difference is rela- tively small considering a 10-year project life cycle and the estimat- ing precision of this early project phase. Technological changes could be made to the two system options to try to reduce their NPC's and hopefully get a stronger financial argument for one over the other. This case study's financial evalu- ation didn't make a strong state- ment in favor of one option over the other, so weighing the two options' technical aspects against each other this project, the assumption that all maintenance would be sched- uled was made, which is why extra downtime for maintenance isn't shown in either of the tables. The CAPEX estimates are also presented in Tables II and III and represent the total installed project cost, including direct costs, indi- rect costs, and contingencies. A summary and comparison of the two options' OPEX and CAPEX estimates are shown in Figure 3. Comparing the two options' OPEX and CAPEX evaluations to one another showed that the pneumatic option (the blue bar) had a lower CAPEX than the mechanical option (the orange bar) — roughly half the cost — but that the pneumatic option had approximately double the OPEX. Traditionally, the decision to select the option with the lowest CAPEX could rapidly be made when comparing the two systems in Figure 3. However, differ- ent financial tools are available that highlight the importance of including a system's OPEX in the decision-making process. One tool that we feel is relevant for com- paring technological options is the net present cost (NPC), which allows you to compare the options' total life cycle costs, also shown in Figure 3. This method uses an escalation rate for the OPEX and a nominal discount rate to bring the options' life cycle CAPEX and OPEX costs to an NPC in "money of today" or how much it's worth right now. This is a detailed sub- ject though and can't be discussed in-depth in this article. Nevertheless, an NPC for both options was calculated over 10 years based on the initial CAPEX and recurring OPEX values pre- sented in this study while account- ing for a 10 percent discount factor and 2.5 percent OPEX escalation. The mechanical option's NPC was FIGURE 4 Case study 2 estimates summary 1 - Mechanical 2 - Pneumatic Cost $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- CAPEX OPEX 10-year NPC FIGURE 3 Case study 1 estimates summary 1 - Mechanical 2 - Pneumatic Cost $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- CAPEX OPEX 10-year NPC