Generator Working Hours and Productivity

You should, "accept the accountants view".

Well lynlynch, I really am unable to reconcile the practicality of the accountant's view.....how can a generator work more than (365 x 24) hours in a year.....whatever be the cumulated production line hours, the generator that works 365 x 24 hours around the clock (day in day out) can ONLY WORK THAT MANY HOURS AS THERE ARE IN A YEAR i.e. 8,760Hours and not ONE HOUR MORE.

Am I missing something fundamental?? Is there any need for me to go back to school maths??

Regards

Baiju

Either accept the accountant's view or buy another generator.

You know that the generators cannot run more than 24 hours a day.

So, with a 9,225 hour fuel budget for 8,760 hour project, you have extra money to spend.

Lyn, its not a 9,225 hour fuel BUDGET that we're talking about....9,225hours is what the accountant says is the SUM TOTAL OF HOURS CONSUMED BY ALL OUR PRODUCTION LINE PLUS THE PACKAGING LINE.....he may be right, for example, to manufacture the annual targeted volume of product A it may take 3,000Hours based on machine capacity, to make Product B (which operates on a completely different production line) it may take 4,000Hours and for packaging line it may take 2,225Hours. THE SUM TOTAL OF HOURS OF ALL LINES IS 9,225 Hours....ALL OK.....but my point is that our 2,000kVA generator can support the entire factory (production floor & offices) day in & day out , and our generator will run only for 8,760 Hours (365 x 24) maximum in a year. All this production hours (9,225Hours & its split up) may be required for OVERHEADS ALLOCATION etc but for calculating ANNUAL DIESSEL CONSUMPTION of Generator, I think we need to consider 8,760Hours and not the SUM TOTAL of all Product Line Hours.

This is the same as saying one guy works 5000 hrs and another works 4225 hours and the total hours worked is 9225 hrs which correct. However the generator only had to run 5000 hrs to keep the lights on. Baiju, You are correct.

I've just read some great answers from thinkers in which I enjoy very much. However, I don't think a bean counter would make a mistake like that! I tend to think there's a presentation problem. We appreciate your confidence in our engineering abilities but I think you should talk to him!

You are correct.

BAIJU,

An extra 19 days worth of Diesel could be the amont of Diesel that is wasted during maintenance routines during the year. Filter changes and fuel sump emptying or some other stuff the bean counter compensated for so you won't run out of fuel on the last month. Does the boss have a Diesel powered pleasure boat or vehicle?

Jon

Wow,

Your accountant is making mistake without doubt.

But I would have taken following steps,

1. I would consider consider only 8000 running hours of standard operation for any of the DG remining 760 hours will be for prevntive maintenance and any unforseen breakdown.

02. For calculation fuel cost I would calculate total power requirement for 9225 hours and derive fuel consumption.

Thanks Everybody,

I am not inclined to consider 9225Hours for fuel cost consumption simply because that many hours dont exist on Earth in a Year as far as RUNNING OUR GENERATORS are concerned in a year......Now for preventive maintenance etc. we have factored that in by having a standby generator alongwith two mainframe sets because in this part of West Africa,power from GRID is non-existant and Generators are the prime source of power supply while GRID is a back-up.

Im aware that the bean counters dont do mistakes like that but there is always a possibility that while making detailed calculations on breakeven, Profit-Volume, IRR, sensitivity analysis, Gross Margins & Mark ups (I mean pretty much all the financial & accounting Jargonised measures), the guys COULD VERY EASILY miss something so fundamental.

Regards

Baiju

Surely the correct answer has already been given by several posters here! You have two generators, each one can run a maximum (forgetting time for maintenance for the moment) of 8,760 hours, so the theoretical maximum is surely 17,520 Hours.

Naturally, the actual run time will be less, but it can still be more than one year quite easily........

Am I seeing this too simply????????

Hi Andy, thanks for your input.....we have two generators that will have to RUN SIMULTANEOUSLY to support our factory & office....hence 8,760Hours x USD0.67/Ltr of Diesel Cost x 2Generators is what I said should be the Total Annual Diesel Cost estaimate.

We will also have a third generator as a backup to the TWO MAINFRAME generators to provide for downtimes & maintenance.

Hence at any point in time, there will be TWO generators running TOGETHER to power our plant.

Hope this is clear to you now.

Regards

Baiju

Then the "Over" one year running time is simply explained. Many thanks.

hi Baiju,

your accountant has obtained the total operating hours of 9,225 as the aggregate, and is doing it this way (annual figures are just examples):

line 1 operates for 2500 hrs, while

line 2 operates for another 2500 hrs (simultaneous with line 1)

line 3 operates for another 2000 hrs (simultaneous with line 1 & 2)

packaging line operates for 2,225 hrs (serving lines 1, 2 & 3)

therefore, total aggregate operating hours = 9,225. however, he is wrong in using 9,226 hrs in multiplying it with hourly fuel consumption. each of the generators' fuel consumption, multiplied by the generators' operating hours, and summed up, should be sufficient to obtain the annual fuel consumption cost.

to wit (again as an example of annual figures),

fuel consump'n cost Gen. 1 = 2500hr x 164 ltr/hr x USD0.67/ltr = USD274,700

fuel consump'n cost Gen. 2 = 2700hr x 165 ltr/hr x USD0.67/ltr = USD298,485

TOTAL fuel consump'n cost for 2 generators = USD573,185

the above the hours reflect the actual hours the generators are supporting the lines. the actual operating hours of the lines are not relevant because the lines are not consuming fuel, but the generators are. don't you have Industrial Engineers to determine this for you? this shouldn't be an accountant's job.

HTH!

Hi Langyaw, you are spot on with the analysis.....Im grateful for the explanation that matches my thinking......the issue is sealed with your take that "Lines dont consume fuel, generators do".....that says it all.

It was just that when the whole NUMBER ARMY of our company was supporting the accountant's math and none saying "YES" to my calculation I started thinking if there is some fundamental FLAW in my head???

Well, friends AT LAST I HAVE BEEN ABLE TO CONVINCE THE BEAN COUNTERS that what I said is sensible......just brings to mind that "Right is Right even if the whole world is against it and Wrong is Wrong even if the whole world supports it"

Thank you all once again for the support.

Regards

Baiju

First, bean counters do make mistakes and they make big ones.

Second, there are too many variables in the presented formula. Where did everyone get and accept the 75% load for 24 hours?

Third, a better approach to the cost of fuel consumption would be to select an average productive day, calculate the energy demand and find the fuel consumption for that day. Apply a variable percentage for unforeseen increases or decreases in production. You will have true value for daily fuel consumption, and screw the number of hours used.