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Modelling of Cost Estimates for the Geometrical Calibration of Upright Oil Storage Tanks

Author

Listed:
  • Olayinka Oluwole Agboola

    (Department of Mechanical Engineering, Federal University of Technology Akure, Nigeria,)

  • Olufemi Basil Akinnuli

    (Department of Mechanical Engineering, Federal University of Technology Akure, Nigeria,)

  • Aremu Mutalubi Akintunde

    (Department of Mechanical Engineering, Federal University of Technology Akure, Nigeria,)

  • Buliaminu Kareem

    (Department of Mechanical Engineering, Federal University of Technology Akure, Nigeria,)

Abstract

Cost estimation is a fundamental activity in engineering management and business decision making. It normally involves estimating the quantity of labor, materials, utilities, floor space, sales, overhead, time and other parameters over a given period of time. These estimates are used typically as inputs to deterministic analysis methods or to stochastic analysis methods. Cost of tank calibration which depends on the factors such as the capacity of tank, number of labour, method adopted, equipment etc. has not been standardized. In an attempt to standardize the cost of tank calibration, two separate models, one each for the two common methods of tank calibration; Manual Strapping Method (MSM) and Electro Optical Distance Ranging (EODR). These models were validated with actual cost of tank calibration obtained from four renowned calibration companies in the country and were found to be within the acceptable limit of 10% deviation.

Suggested Citation

  • Olayinka Oluwole Agboola & Olufemi Basil Akinnuli & Aremu Mutalubi Akintunde & Buliaminu Kareem, 2020. "Modelling of Cost Estimates for the Geometrical Calibration of Upright Oil Storage Tanks," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 464-470.
    • Handle: RePEc:eco:journ2:2020-01-57
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    References listed on IDEAS

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    1. S. Hoozée & L. Vermeire & W. Bruggeman, 2009. "A risk analysis approach for time equation-based costing," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/556, Ghent University, Faculty of Economics and Business Administration.
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      More about this item

      Keywords

      calibration; modeling; cost estimation; oil storage tank; standardization;
      All these keywords.

      JEL classification:

      • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
      • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
      • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
      • D7 - Microeconomics - - Analysis of Collective Decision-Making

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