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As a Cost Engineer, if there is a choice between two production methods, the favored method would be the one involving the lowest total cost. In spite of that, in order to effectively make the selection on this basis, it is fundamental that operational unit cost benchmarks be calculated and identified.
This short dissertation on the Unit Cost Approach to Estimating Operational Materials Budget is geared to introduce the unit cost method of obtaining the total material (or process) cost applied to a Steam Power Plant, and be made a template for similar production budget calculations of any similar installation.
I hope the readers will find this write up useful. Your comments are welcome.
Rufran C. Frago, P.Eng, PMP®, CCP, PMI-RMP®