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A major component of industrial, process, and power generation plant estimating involves scaling available equipment price data to fit the equipment sizes of the present project. One of the largest difficulties facing the estimator is developing cost information with minimal engineering design data. This is particularly true of equipment costs. When estimators with years of experience are asked to quickly produce the price of a piece of equipment, they often will use the "six-tenths rule" or other scaling factors. Many times, this cost information is required in a time frame that does not allow for obtaining vendor quotes or bids. It is in these instances that the scaling of costs is most useful; however, the estimator must always use caution when using this method to develop costs. Early in a project (with 0-10 percent of the engineering completed), little may be known of the detailed technical parameters associated with the major equipment. By using existing technical information for similar equipment, existing cost data can be adjusted for size or capacity with reasonably good accuracy.
As shown in figure 1, the scaling process applies primarily to the order-of-magnitude and conceptual cost estimates. (Figure 1 omitted) For years, estimators have used this method. However, having been asked recently to document this process at Sargent & Lundy, we noted that certain rules previously in use were not valid. This prompted us to prepare a study to document the accuracy of scaling factors and when and how they should be used.
This article addresses some results of our study that can be used to assist the estimator in using scaling factors with more accuracy than may have been possible with previously published data concerning the subject. The process that a cost estimator could use to develop scaling actors unique to his/her own type of work is also addressed. This article is not, however, an endorsement for using scaling factors when other more sound methods are available for developing costs.
DEFINITION OF EXPONENTIAL SCALING FACTORS
Exponential scaling factors are perhaps the most common scaling methods used. The six-tenths factor rule is a logarithmic relationship that uses the price of a similar piece of equipment to obtain the price of one of another capacity where the price is not known.
The...