rate for essentially all personnel whose time is charged to a job, while others charge a rate that varies by function or even by the individual assigned to the job. Sometimes costs are broken down further to identify and charge for specific assets outside of the burdened labor rate. This is most likely to occur in a case in which an asset of particularly high value is used only on some jobs. In such a case, dividing its cost among all jobs would subsidize those jobs that require this equipment at the expense of those that don’t. The result would be extremely competitive prices on the jobs requiring this equipment, but a lack of competitiveness on those that don’t need it.
Companies arrive at burdened labor and equipment rates in different ways, but the intent is to allocate costs in a way that allows bidding jobs, recovering costs, and making a reasonable profit. Because the fabrication environment is competitive, it is important to understand enough about the individual cost elements that (1) wise trade‐offs between design approaches can be made to ensure competitiveness, and (2) accurate total cost of a particular fabrication can be identified for pricing purposes and to ensure a reasonable profit.
1.3.2 Design choices
1.3.2.1 Major cost decisions – long term choices
Some design choices must typically involve the customer because they involve significant product cost differences that can only be amortized over the long run. An example of this occurs with a vessel that will contain a corrosive medium. In this case, material choices may make a significant difference in short term vessel costs. A vessel might be fabricated with a corrosion allowance, anticipating that at the end of some term (approximately five years, for example) the vessel will simple be replaced. Another approach would be to fabricate it entirely of a material that does not undergo corrosion in its particular internal and external environments, or to clad it with such a corrosion‐resistant material. The cost of fabricating a pressure vessel of high alloy steel or other material may be significantly greater – perhaps double or more – than that of a fabrication using steel. If a more expensive product allows essentially unlimited life versus five years for the steel pressure vessel, then amortizing the cost of the single vessel versus initial vessel purchase plus replacements, and downtime and labor for the replacement, can make the farsighted decision attractive. Whichever way this decision goes, all other cost issues still apply.
1.3.2.2 Labor–material trade‐offs
Some choices regarding materials simply minimize material costs. Others have the additional advantage of reducing labor. A third category reduces costs by eliminating whole operations. A fourth category is to increase labor in situations where labor cost is minimal and material cost can be reduced without a comparable increase in cost of labor.
1.3.2.3 Selecting a less expensive material
Cost reduction by minimizing material cost is represented by a situation in which two different metal alloys of different costs (per unit weight) result in the same wall thickness. This occurs when either the wall is fixed (for example, when a minimum wall is required for handling or for stiffness reasons), or when rounding from the required minimum wall to the next stock thickness results in the same fabricated thickness for both. If there is no other operational reason to use a more expensive material (SA 516‐70, for example, rather than SA‐36), then the obvious choice is a less expensive one.
1.3.2.4 Selection of a material with a higher allowable stress
In a given class of materials, using one with a higher allowable stress is beneficial in pressure vessels with high pressures and larger diameters. For example, use of SA 516‐70 rather than SA 285C reduces wall thickness. The cost of material may remain about the same, since SA 516‐70 is more expensive per pound than SA 285C, a fact somewhat balanced by the lesser amount of material used. The reduction in wall thickness reduces cost in multiple ways, however. The time needed for rolling the vessel shell and forming the heads is less. The thickness of welds and therefore weld volume and welding time are diminished. Handling costs may be less. And depending on the fluid medium, the reduction in vessel weight might lead to smaller or thinner supports or saddles.
1.3.2.5 Component selection to eliminate operations
Design changes to eliminate whole operations are options to be considered. This category includes selection of vessel diameter to coincide with standard pipe sizes and the use of integrally reinforced designs. Figure 1.1 shows a detail of a hemispherical head where additional material on the outside is left in place to minimize machining cost.
If a shop rolled and welded vessel shell or nozzle can be replaced by a piece of off‐the‐shelf pipe, whether seamless or welded, then the costs for layout, crimp, and individually rolling that shell are all included in the pipe cost, which is typically produced in a dedicated facility that only produces pipe, but does it very efficiently. When this can be done, the material cost of the completed shell section is often little more than the material cost of the unrolled shell plate. A further benefit is that standard caps may then be available for use as vessel heads. These, too, being mass produced, will likely be significantly less expensive that custom‐formed heads.
When nozzles beyond a certain size penetrate a vessel wall, reinforcement is required to take the pressure loads that would otherwise have been transmitted through the material cut from the shell or head for placement of the nozzle. The ASME code puts limits on what material may be counted as contributing to this load carrying capability. Simple area replacement is typically used, provided that the reinforcing material is of strength equal to or greater than that of the material it is replacing. There are numerous ways of providing this material. Because the code allows essentially any material within a certain distance to be counted, any excess material in the shell itself, the nozzle wall, the weld, added reinforcing pads, or shell inserts, may be considered.
The best means of providing reinforcing beyond that inherent in the design is often fairly obvious, but in some cases a cost estimate for more than one approach may be needed to evaluate the trade‐off.
If a vessel has a limited number of penetrations requiring reinforcement, accepting the labor and material cost of providing reinforcement on a few nozzles may be inexpensive compared to providing a heavier shell that results in an integrally reinforced design. When a vessel has many nozzle penetrations requiring reinforcement, however, the labor associated with providing that reinforcement may far exceed the additional cost of a heavier shell wall and thicker shell and nozzle to shell welds. If most or all of the nozzles requiring reinforcement are located in the same area, it may make sense to make one shell course thicker than the others to provide integral reinforcement.
Figure 1.1 Outside machining of a hemispherical head
Another way of providing additional nozzle reinforcement when a flanged nozzle is required is the use of LWN flanges. If the nozzle protrusion is not excessive, then unless the cost of labor is extremely low or the cost of material extremely high (e.g., high nickel materials for their corrosion resistance or high temperature strength), it will almost always be more economical to use an LWN flange than to add a reinforcing pad. The neck of an LWN flange normally has an outside diameter equal to the hub diameter of a slip‐on flange, and it may be ordered in a variety of lengths. Thus, particularly if it is acceptable to allow the nozzle to protrude into the vessel, an LWN flange can almost always fulfill the need for additional reinforcement. While the cost of an LWN flange is significantly greater than that of either
