The net annual operating cost (AOC) for a water treatment filtration plant for a semi-conductor fabrication line was estimated to be $1.5 million per year. The estimate was based on the $200,000 per year cost of a 1-MGD plant. The exponent in the cost-capacity equation is 0.80. (a) What was the size of the larger plant? (b) Build a spreadsheet to answer the same question. (c) If the plant manager has limited the AOC to $1 million per year, use your spreadsheet to determine the maximum MGD size plant that can be planned.
The net annual operating cost (AOC) for a water treatment filtration plant for a semi-conductor fabrication line was estimated to be $1.5 million per year. The estimate was based on the $200,000 per year cost of a 1-MGD plant. The exponent in the cost-capacity equation is 0.80. (a) What was the size of the larger plant? (b) Build a spreadsheet to answer the same question. (c) If the plant manager has limited the AOC to $1 million per year, use your spreadsheet to determine the maximum MGD size plant that can be planned.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
The net annual operating cost (AOC) for a water
treatment filtration plant for a semi-conductor
fabrication line was estimated to be $1.5 million
per year. The estimate was based on the
$200,000 per year cost of a 1-MGD plant. The
exponent in the cost-capacity equation is 0.80.
(a) What was the size of the larger plant?
(b) Build a spreadsheet to answer the same
question. (c) If the plant manager has limited
the AOC to $1 million per year, use your spreadsheet
to determine the maximum MGD size
plant that can be planned.
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