It's hours for Alchemy, days for Artificing. Alchemy is based on the Drain value (before anything that modifies the drain, so if you bring the drain down from 5 to 4, it's still 5 hours/days).
The test is Enchanting + Magic opposed by the Drain value, net hits become Potency. The preparation is at full power for Potency×2 hours, and Potency decreases by 1 every Potency×2 hours. So 4 potency prep is good for four hours, in the second four hours it's 3 potency, the third four it's 2 potency, the fourth four it's 1 potency, then it fizzles as the clock strikes 16th hour. (See response later.)
Using the preparation is a Potency + Magic (of the alchemist's attribute) test with no Drain. So Potency replaces the Sorcery skill of the spellcaster.