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Cost Calculations

Cost Calculations
Cost estimates for bidding on welding work in projects Setting rates for incentive Programs Comparing Welded construction to alternatives Comparing competing welding processes

Cost of Weldment vs Cost of a Weld

Cost Calculations
Cost of Welding
($/ft) Cost incurred to make a weld (includes joint prep, consumables, labor, overhead, pre- & post-weld treatment, etc.) Used to compare cost advantages of weld vs. Other manufacturing processes Used to decide on the most cost effective joint design or most cost effective welding process to use Used as a basis for investment in new automated equipment

Cost of Weldment
($/piece) Cost incurred to make entire structure (includes all of above plus summation of all the weldments and raw material costs) Used to bid on a welding job

Cost Calculations
The Basis - Welding Procedure Specification (WPS) This is the starting point for cost estimating.
Procedure should include: Joint details Welding process Type of filler Type of gas/fluxes Welding current Position (operator factor) Travel speed Post weld treatment

Cost Calculations

Main Factors
INDIVIDUAL PARTS OF ESTIMATE (Look at each item individually) 1. Cost of Joint Prep 2. Cost of Materials (Consumables) 3. Cost of Materials (Flux & Shielding) 4. Labor Costs 5. Power Costs 6. Post Weld Costs 7. Overhead Costs

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

Cost Calculations

1. Cost of Joint Preparation Machined Joints - (most expensive) Flame or Plasma Cut Joints Square Butt w/o Surface Prep - (least expensive) A) Do cost analysis on several joint designs to minimize joint prep cost: Note:If a non-prequalified joint is used, you may incur the added cost of procedure qualification. B) Trade off reduced costs to prepare joint with amount of weld metal to fill joint. Example: A submerged arc joint can be flame cut (inexpensive) but may require a lot of weld metal to fill the joint (expensive).s

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

Cost Calculations

2. COST OF MATERIALS (CONSUMABLES) Procedure a) Calculate the theoretical weight of weld metal required to fill the weld joint b) Calculate the weight of filler actually consumed (spatter etc. included)
1. 2. Estimating Losses Automated Method

c) Calculate the electrode costs

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

Cost Calculations

2. COST OF MATERIALS (CONSUMABLES) a) Theoretical weight of weld metal


Cross Section Area of Joint - Use geometry or refer to tables for standard joint configurations

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

a)

Cost Calculations

b)

c)

Calculate the theoretical weight of weld metal required to fill the weld joint Calculate the weight of filler actually consumed (spatter etc. included) 1) Estimating Losses 2) Automated Method Calculate the electrode costs

2. COST OF MATERIALS (CONSUMABLES) a) Theoretical weight of weld metal (contd)


Weight of Deposit (lb) = CSA (in2) x Density (Kg/in3) x Length (in) Or Weight of Deposit (lb/in) = CSA (in2) x Density (lb/in3) Th Wt of deposit (lb/ft) = CSA (in2) x density (lbs/in3) x 12 (in/ft) Th Wt of deposit (lbs) = Wt Weld (lb/ft) x Total ft of weld (ft) Reinforcement
Add 10% for single groove welds Add 20% for double groove welds Add 10% for fillet welds

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

Cost Calculations

Calculate the theoretical weight of weld metal required to fill the weld joint Calculate the weight of filler actually consumed (spatter etc. included) 1) Estimating Losses 2) Automated Method Calculate the electrode costs

2. COST OF MATERIALS (CONSUMABLES) b) Estimating Losses 1. Electrode Losses (SUM)


Stub Losses 14 with 2 stub = 14% loss 18 with 2 stub = 11% loss 28 with 2 stub = 7% loss Coating or Slag Losses Thinner coating E6010 = 10% loss Heavy coating E7024 = 50% loss Spatter Losses Depends on technique, usually = 5-15% loss 2. Electrode Filler Metal Yield Covered Electrode = 55-65% yield SMAW 14 manual SMAW 18 manual = 60-70% yield = 65-75% yield SMAW 28 automatic Solid Bare Electrode For = 95-100% yield Submerged arc = 95-100% yield Electroslag = 90-95% yield GMAW = 100 Cold Wire Tubular-flux Cored Electrodes For 80-85% yield Flux Cored Arc Welding = Cold Wire = 100%

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

Cost Calculations

Calculate the theoretical weight of weld metal required to fill the weld joint Calculate the weight of filler actually consumed (spatter etc. included) 1) Estimating Losses 2) Automated Method Calculate the electrode costs

2. COST OF MATERIALS (CONSUMABLES) b) Wt of filler required Wt of filler Required (lbs) = Th wt of deposit (lbs) / (1- total electrode loss) Wt of filler Required (lbs) = Th wt of deposit (lbs) / {filler metal yield (%) } Wt of filler Required (lbs/hr) = Wire feed speed (in/min) x 60 . Length of wire per weight (in/lb)

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

Cost Calculations

Calculate the theoretical weight of weld metal required to fill the weld joint Calculate the weight of filler actually consumed (spatter etc. included) 1) Estimating Losses 2) Automated Method Calculate the electrode costs

2. COST OF MATERIALS (CONSUMABLES) c) Calculating the Electrode Cost Electrode Cost ($/ft) = Wt of filler required (lbs)x Electrode Price ($/lb)

Electrode Cost ($/ft) = Th wt of deposit (lbs/ft) x Electrode Price ($/lb) Filler metal yield (%)

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

Cost Calculations

3. COST OF MATERIALS (FLUX & SHIELDING GASES) Calculation of Flux Costs Flux Cost ($/ft)=Flux price ($/lb) x Weld Metal Deposit (lb/ft) x Flux ratio Where, Flux Ratio = Wt of Flux (lb) Wt of Wire (lb) Sub Arc = 1-1.5 (approx. 1 lb flux/ 1 lb wire) Electroslag = 0.05-0.10 Calculation of Shielding gas and Backing gas Costs
Gas Cost ($/ft) Gas Cost ($) Gas Cost ($) = = = {gas price ($/ft3) x flow rate (ft3/hr)} Travel (ipm) x 1/12(ft/in) x 60(min/hr) Weld Gas Cost ($/ft) * feet of weld
Or

{Gas price ($/ft3) x flow rate (ft3/hr) x weld time (min)} 60 (min/hr)

Calculation of Miscellaneous Costs


Guide tubes Studs / Ferrules Spot-weld electrode

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

Cost Calculations

4. LABOUR COST (single greatest factor in total cost of weldment) Operator Factor: percent of time that a welder is actually making a useful weld.
Semi-automatic and automatic plants have higher operator factors Field welding / construction work with small welds in scattered locations have low operator factor Welding in the flat position has higher operator factor than horizontal, vertical, overhead: 1. Faster travel speed 2. Fewer defects / fewer repairs Use of fixtures, positioners, and handling equipment increases operator factor Slag chipping, electrode changes, moving from joint to joint all reduce operator factor

Labor Cost ($/ft) =

Welder pay rate ($/hr) . Travel Speed (in/min) x Operator Factor (%) x 5

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

Cost Calculations

4. LABOUR COST (single greatest factor in total cost of weldment)

Deposition Rate (lb/hr) = melt of rate (in/min) x 60 x Filler Metal yield (%) Length of electrode wire per weight (in/lb) Labor Cost ($/ft) = Welder pay rate ($/hr) x Weight of weld metal deposit . Deposition Rate (lb/hr) x Operator Factor (%)

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

Cost Calculations

5. Power Costs

Local Power Rate ($/kWh) includes: Energy charge Fuel adjustment charge Taxes Demand charge (time of day) Power factor penalty Power Source Efficiency (%) See machine performance curves (see attached)

Power Cost ($/ft)= local power rate ($/kWh) x volts x amps x Wt Weld metal deposit (lb/ft)}

1000 x dep rate (lb/hr) x OpFact (%) x Pow Source Eff (%)}

INDIVIDUAL PART OF ESTIMATE (Look at each item individually) Cost of Joint Prep Cost of Materials (Consumables) Cost of Materials (Flux & Shielding) Labor Costs Power Costs Post Weld Costs Overhead Costs

6 & 7. Post Weld and Overhead Costs


POST WELD COSTS

OVERHEAD COSTS
Salaries: executives, supervisors, inspectors maintenance people, janitor, etc. (those costs which can not charge directly to weldment costs) Rent / Depreciation of plant Taxes Maintenance supplies and costs Utilities (not charged to weldment) i.e. light, plant heat, etc. Employee benefits Insurance

Final Machining Grinding/Polishing Heat Treating Shot Blasting Straightening Inspection

Overhead cost ($/ft) =

Overhead rate ($/hr) , travel speed (in/min) x OpFact (%) x 5

Overhead cost ($/ft) = Overhead rate ($/hr) x Wt Weld (lb/ft) dep rate (lb/hr) x OpFact (%)

Welding Cost - Per Foot Analysis Cost of Joint Prep ($/ft) Cost of Weld Metal Flux Cost Gas Cost Misc. guide tubes etc. Labor Cost ($/ft) Power Costs Overhead Costs TOTAL

Welding Cost - Per Piece Analysis Base Material Cost ($/pc) Cost of Joint Prep Cost of Weld Metal Flux Cost Gas Cost Misc. guide tubes etc. Labor Cost ($/pc) Power Cost Post Weld Costs Overhead Costs ($/pc) TOTAL

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