Track: Engineering Management

Abstract

Safety management of industrial fuel-fired thermo-processing equipment is important to protect workers, infrastructure and the environment. Potential risks include fire and explosions which can be catastrophic if not managed. Various regulatory agencies across the globe have introduced safety regulation such as NFPA 86, EN 746 and SANS 329 to enforce combustion safety requirements. Like other regulations, these regulations are also experiencing resistance by firms. The main reason of resistance is the unjustifiable compliance costs. The aim of this study is to develop a customized model which can be applied to analyse the cost and benefits of fuel-fired thermo processing equipment safety regulations. The model consists of three components namely, process simulation, financial modelling and cost benefit analysis. Process simulation is used to observe the performance of the compliant and non-compliant system. A financial model is used to observe the effect of process alterations on the cash flow of the project over a period. Once all costs and benefits are projected a cost-benefit analysis can be performed to determine the net present value (NPV) of the project. If NPV > 0, it proves that safety regulation has financial benefit, and if NPV < 0, the project must be rejected. When comparing different alternatives such as project A and B, if NPV(A) > NPV(B), project A must be chosen and vice versa