Order-Of-Magnitude (OOM) Estimate

This estimate is generally used by client or management in feasibility studies, for evaluating the best process, the establishment of plant size and the economic feasibility of the project.

For the preparation of the OOM, the estimator requires the following general and engineering information:

The cost of the present project is determined by the ratio method. The price of the previous project is adjusted for size (capacity) by using the 6-10th's rule

Capacity Scaling (6-10th's rule)

Cn = Co (Sn / So)0.6
Cn = cost of equipment to be estimated (new cost)
Co = known cost of existing equipment (old cost)
Sn = size of new piece of equipment
So = capacity of existing piece of equipment

The size adjusted cost is now adjusted for inflation by using published price indices; for example the Chemical Engineering Plant Cost Index (CEPCI) published monthly in Chemical Engineering. This index had a base value of 100 in 1957-59; the value in May 2001 was 395.4


A 200tch factory cost USD50m in 1995; what is the cost of a 300 tch factory today: Price index in 1995 was 342.5 Price index today is 380.2

Cn = (380.2 / 342.5) 50 (300 / 200)0.6
Cn = USD70.8m

The accuracy off the OOM estimate should be in the range -40% to +40%