Chapter 3

Appendix B
Chapter 3

Development of Objective
Function

1
 Optimize L/D for a Pressure Vessel
D 2
min C DL
2
D, L
D 2
s.t. V L
4
Chapter 3

~
4V
eliminate constraint : L
D 2
D 2 4V
C
2 D
different. and solve
1
4V 3
D opt


1
4V 3
Lopt


opt
L
1 ??? (vs. standard rule L/D 3)
D 2
 erroneous assumptions

(1) dished ends (not flat)

Ae = 2(1.16 D2) = 2.32 D2
(2) thickness is a function of D (not constant)
(3) fabrication costs
$ ends > $ sides
Chapter 3

(1.5x)

C S DLt 3.48S D 2t
S fab cost of sides ($/lb.)
t thickness
density
PD
t t0 (corrosion allowance) 11700 psi
2 250
P 250 psi
t0 .125 inch t 0.0108D 0.125
3
 neglect S, in obj. fcn.
volume constraint (dished heads)
D 2
V (L D )
4 3
Chapter 3

solve for L
25,000 gallon ta nk
C .0263D 3 .304 D 2 144.29 1670 / D
no analytical solution
D opt 11 ft.
Lopt 31.7 ft.

4
 capacity pressure psi
gal 100 250 400
Chapter 3

2500 1.7 2.4 2.9

25000 2.2 2.9 4.3

P 0 L D 1

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 .05
i .004167
12
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 F1 F2 Fn
present w orth P ...
1 i (1 i) 2
(1 i) n

Insulation example -- fixed vs. operating costs (Fi)

annualization factor (repayment multiplier)

Chapter 3

i (i 1) n
r for Fi = constant = F (cash flow)
(i 1) n 1
F
f1 I 0
r
initial cumulative savings
investment (discounte d)
or
rf1 f 2 F rI 0 22
 There are several disadvantages to using IRR
in optimization (requires iterative solution).
NPV can be shown to be equivalent to using
an annualization factor (series present worth
Chapter 3

factor).
- Steam Generator Example

23
 Chapter 3

24
 Steam Generator Flow Diagram
Chapter 3

$
F (steam generated)
yr
I 0 area ($25/ft 2 )

ROI F / I 0 vs.
(1 i ) n 1
NPV .F I 0 F / r I 0
i (1 i ) n
25
opt
T2 ( w0 , r , c p , U )
 Chapter 3

26
 In the previous section we only briefly mentioned the
financial assumptions used in profitability analysis.
Any detailed analysis of a project requires specifying
the following parameters:

(1)initial investment
Chapter 3

(2)future cash flows

(3)salvage value
(4)economic life
(5)depreciation
(6)depletion
(7)investment tax credit
(8)taxes
(9)inflation
(10)debt/equity ratio

27
 MANUFACTURING
REVENUE (CASH OPERATING)
OPERATIONS
SALES EXPENSES
INCOME
Chapter 3

SALVAGE VALUE OPERATING INCOME (PROFIT)

DEPRECIATION

NET INCOME BEFORE TAXES

CASH

FLOW

NET INCOME FEDERAL INCOME TAXES

AFTER TAXES

Figure 3.3 Computation of Cash Flow

28
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36
 A summary of the calculations is
Value Net Internal
Chapter 3

Insulation Insulation of fuel Payback Return on Present rate of

Thickness Cost saved period investment value return
x (cm) ($) ($/year) (years) (% per ($) (%)
year)
1 2,135 5,281 1.27 79 16,013 247
2 4,270 8,182 1.64 61 23,847 191
3 6,405 10,020 2.01 50 28,028 155
4 8,540 11,288 2.38 42 30,250 130
5 10,675 12,215 2.75 36 31,301 112
6 12,810 12,984 3.10 32 31,809 98
7 14,945 13,480 3.48 29 31,378 86

37