OWG...I'm very thankful for your quick respond to my requested. It will help me a lot..sometimes I wonder what make you so being a helping person. Maybe that's a nature of yours. Anyway, the information that you gave me is really important for me and my friends. May others help you as much you help them.
sincerely, zamir.
contains an equation trying to fit cost index data from 1950 onwards to a sixth degree polynomial. Come on! This is not good engineering practice for any such set of data.
1. Most of the parameters in that sixth degree equation are not significant
2. A cost or price index curve should be expected to be exponential, rather than polynomial, as this would be the case for a constant growth rate (or rate of inflation in this case).
3. Looking at the data they seem best described by one exponential (i.e. constant rate of inflation) for the years 1950-80, then a new exp curve (reduced inflation rate) for the years thereafter
4. Any model should be tested by its ability to predict. The polynomial predicts a sharp price increase in 2003 and the years ahead. Is that credible? If you just want to interpolate, a simple linear interpolation between adjacent points will do.
A footnote on item 2: I once saw an attempt to fit gas density vs. temperature (constant pressure) by using a high degree polynomial, disregarding the ideal gas law which tells us that including a 1/T term would explain most of the variation (not to mention the work done on equations of state to model deviations from this ideal behavior). Linear regression (aka curve fitting) is a wonderful tool, but a little insight and critical sense are necessary too.
Harg - Thanks for the constructive criticism. The real message in the link is the point data. I sure would not want to try to predict the future of the economy.
Hello, I really need any way to predict or estimate this year's Index and next year's too... I sure agree that a potencial adjustment to th data is not the best way to do it, so I wonder if the best way is to have a linear adjustment of the las three or 4 points and then calculate this and next year's index...
Governments and banks usually produce predictions for inflation into the near future. That might be a good basis for an estimate of future CECPIs. Since inflation is very low, you won't be far out if you assume 0 to 2% annual inflation. One client has assumed 3% per year for the past few years just to be on the conservative side with project cash flow estimates.
I'm having a little trouble finding relatively recent cost estimation data for a jacketed, glass-lined, stainless steel reactor (stirred). I'd like to estimate the cost for each of several sizes.
Hi
I´m looking for a preliminary estimate price for the following equipment, unsuccessfully so far, can anyone help me?
Nauta type mixer (atmospheric/jacketed/10m3)
Steel plate belt for resin cooling/flaking
The latest I have at hand is Feb 2004 preliminary at 434.2 from the May 2004 issue of Chemical Engineering. The annual CEPCIs are shown below.
1998 389.5
1999 390.6
2000 394.1
2001 394.3
2002 395.6
2003 401.7 (Just published May 2004)
The latest I have is M&S Equipment Cost Index for 4Q2003, it is 1133.2. It was up only 0.7% from 3Q2003. I won't have later data for a couple of weeks.
I noticed a couple questions about forecasting future inflation rates. Boy, if you could do that, you wouldn't have to work!!
Seriously, I worked for a major petrochem company 25 years ago, and came up with a survey of suppliers for projection of cost increases into the future. Wasn't very accurate, but it was based on a consistent method.
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