RADIATION- PASTEURIZATION COST ESTIMATES 



Assumptions 



In an analysis of plant organization and costs, numerous assumptions are in- 

 volved, particularly in studies of new processes,, Actual plants operate in a complex 

 organizational setting, conditioned by technical and institutional constraints,, For 

 this reason, assumptions and simplifications are necessary to prevent the analysis 

 from bogging down in details. The major assumptions and specifications on which 

 this analysis is based are as follows: 



1. Facility engineering and design costs will be spread over several units, and 

 therefore, are not included in this study as a separate cost item. An indication of the 

 magnitude of these costs is given in appendix table 12 



2. Radiation- pasteurizing facilities will be located at existing fruit and vegetable 

 packinghouses or assembly points,, No major changes in the basic layout and design 

 of existing packinghouses need be made. The radiation-pasteurizing facilities will 

 be added to them; their costs will be added costs. (In actual practice, efficient use 

 of radiation- pasteurizing facilities may require some consolidation of existing 

 packinghouses and assembly points,,) 



3. The purchaser owns the required investment funds,, Operating (or working) 

 capital will be borrowed at a cost of 6 percent, simple interest,, 



4. The net source utilization efficiency for radiation-pasteurization of the 

 specified fruits and vegetables is 30 percent for cobalt 60 and 35 percent for the 

 3-MeVo X-ray machine 



5. As stated in the discussion of the nonuse time (p. 6 )» cobalt 60 facilities 

 are assumed to have a use factor of 95 percent and X-ray machines a use factor of 

 8 percent. 



Cost Components 



The cost components to be evaluated on an annual basis are (1) variable costs, 

 (2) fixed costs, (3) total costs, and (4) average total costs per pound of facility output,, 



Variable Costs 



Variable costs include expenses for labor, source replenishment for cobalt 60, 

 power- source replacement such as tubes and other parts for X-ray machines, 

 electric power to operate conveyors and other ancillary equipment, electric power 

 for X-ray machines, variable office and administrative expense, variable expenses 

 for maintenance and repairs, and other expenses directly related to the volume of 

 output. 



Total variable costs by hours of annual operation for selected sizes of cobalt 

 60 and X-ray machine facilities are shown in table 5. They were calculated by 

 applying specific cost rates to the estimated quantities of the variable services 

 required. The specific cost rates and input quantities used also are shown, and esti- 

 mates of average variable costs per kilowatt hour of annual facility operation are 

 given. 



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