Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 18 views

    Lect 1 - Principles of EE 28092022 120102pm

    Uploaded by

    Eeman Zubair
    This document provides an introduction to engineering economy. It defines key economic concepts like resources, capital, and labor. It also outlines 7 principles of engineering economy: 1) Develop alternatives, 2) Focus on differences, 3) Use a consistent viewpoint, 4) Use a common unit of measure, 5) Consider all criteria, 6) Make uncertainty explicit, and 7) Revisit decisions. The engineering economy process involves developing cash flows for alternatives and selecting a preferred option using criteria like cost. Post-evaluation monitors the actual outcomes compared to projections.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd

    Lect 1 - Principles of EE 28092022 120102pm

    Uploaded by

    Eeman Zubair
    18 views17 pages
    This document provides an introduction to engineering economy. It defines key economic concepts like resources, capital, and labor. It also outlines 7 principles of engineering economy: 1) Develop alternatives, 2) Focus on differences, 3) Use a consistent viewpoint, 4) Use a common unit of measure, 5) Consider all criteria, 6) Make uncertainty explicit, and 7) Revisit decisions. The engineering economy process involves developing cash flows for alternatives and selecting a preferred option using criteria like cost. Post-evaluation monitors the actual outcomes compared to projections.

    Original Title

    Lect-1---Principles-of-EE-28092022-120102pm (4)

    Copyright

    © © All Rights Reserved

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document provides an introduction to engineering economy. It defines key economic concepts like resources, capital, and labor. It also outlines 7 principles of engineering economy: 1) Develop alternatives, 2) Focus on differences, 3) Use a consistent viewpoint, 4) Use a common unit of measure, 5) Consider all criteria, 6) Make uncertainty explicit, and 7) Revisit decisions. The engineering economy process involves developing cash flows for alternatives and selecting a preferred option using criteria like cost. Post-evaluation monitors the actual outcomes compared to projections.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    18 views17 pages

    Lect 1 - Principles of EE 28092022 120102pm

    Uploaded by

    Eeman Zubair
    This document provides an introduction to engineering economy. It defines key economic concepts like resources, capital, and labor. It also outlines 7 principles of engineering economy: 1) Develop alternatives, 2) Focus on differences, 3) Use a consistent viewpoint, 4) Use a common unit of measure, 5) Consider all criteria, 6) Make uncertainty explicit, and 7) Revisit decisions. The engineering economy process involves developing cash flows for alternatives and selecting a preferred option using criteria like cost. Post-evaluation monitors the actual outcomes compared to projections.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 17

    CHAPTER 1

    INTRODUCTION TO ENGINEERING
    ECONOMY
    WHAT IS ECONOMICS ?
    The study of:
    – How to allocate resources effficiently to
    satisfy unlimited human wants

    – How individuals and societies choose to use


    scarce resources
    Resources

    • Land
    • Labor
    • Capital
    LAND
    All gifts of God, such as:
    – Water, air, minerals, sunshine
    – Plant and tree growth
    – Land itself which is applied to the
    production process.
    LABOR
    The efforts, skills, and knowledge of
    people which are applied to the
    production process.
    CAPITAL
    • Real Capital (Physical )
    – Tools, buildings, machinery -- things which have been
    produced which are used in further production
    • Financial Capital
    – Assets and money which are used in the production
    process
    • Human Capital
    – Education and training applied to labor in the
    production process
    PRINCIPLES OF ENGINEERING ECONOMY

    1. Develop the Alternatives


    2. Focus on the Differences
    3. Use a Consistent Viewpoint
    4. Use a Common Unit of Measure
    5. Consider All Relevant Criteria
    6. Make Uncertainty Explicit
    7. Revisit Your Decisions
    PRINCIPLES OF ENGINEERING
    ECONOMY

    1. DEVELOP THE ALTERNATIVES

    – The final choice (decision) is among


    alternatives.
    – Alternatives need to be identified and then
    defined for subsequent analysis.
    PRINCIPLES OF ENGINEERING ECONOMY

    2. FOCUS ON THE DIFFERENCES


    Only the differences in expected future outcomes among
    the alternatives are relevant to their comparison and
    should be considered in the decision.
    PRINCIPLES OF ENGINEERING ECONOMY

    3. USE A CONSISTENT VIEWPOINT

    The prospective outcomes of the alternatives,


    economic and other, should be consistently
    developed from a defined viewpoint (perspective).
    PRINCIPLES OF ENGINEERING ECONOMY

    4. USE A COMMON UNIT OF MEASURE

    Using a common unit of measurement to


    enumerate as many of the prospective outcomes
    as possible will make easier the analysis and
    comparison of alternatives.
    PRINCIPLES OF ENGINEERING ECONOMY

    5.CONSIDER ALL RELEVANT CRITERIA


    • Selection of a preferred alternative (decision making)
    requires the use of a criterion (or several criteria).
    • The decision process should consider the outcomes
    enumerated in the monetary unit and those expressed
    in some other unit of measurement or made explicit in
    a descriptive manner.
    PRINCIPLES OF ENGINEERING ECONOMY

    6. MAKE UNCERTAINTY EXPLICIT

    Uncertainty is inherent in projecting (or estimating)


    the future outcomes of the alternatives and should
    be recognized in their analysis and comparison.
    PRINCIPLES OF ENGINEERING
    ECONOMY

    7. REVISIT YOUR DECISIONS

    Improved decision making results from an adaptive


    process; to the extent practicable, the initial projected
    outcomes of the selected alternative should be
    subsequently compared with actual results achieved.
    ENGINEERING ECONOMY AND THE DESIGN
    PROCESS
    • An engineering economy study is
    accomplished using a structured procedure
    and mathematical modeling techniques.
    • The economic results are then used in a
    decision situation that involves two or more
    alternatives and normally includes other
    engineering knowledge and input.
    ENGINEERING ECONOMIC ANALYSIS PROCEDURE
    1. Problem recognition, formulation, and evaluation.
    2. Development of the feasible alternatives.
    3. Development of cash flows for each alternative.
    4. Selection of a criterion ( or criteria).
    5. Analysis and comparison of alternatives.
    6. Selection of the preferred alternative.
    7. Performance monitoring and post-evaluation
    results.
    ACCOUNTING AND ENGINEERING ECONOMY
    STUDIES

    Modern cost accounting may satisfy any or all of the


    following objectives:

    1. Determine the cost of products or services


    2. Provide a rational basis for pricing goods or services
    3. Provide a means for controlling expenditures
    4. Provide information on which operating decisions may
    be based and the results evaluated

    You might also like