Professional Documents
Culture Documents
Chapter - 1 Introduction To Eng Economy
Chapter - 1 Introduction To Eng Economy
Sullivian
W.G, Wicks
E.M and
Koelling
C.P (2012)
Introduction to
Engineering Economy
1-2
Engineering economy…
1-4
1.1 Why Engineering Economy is
Important to Engineers? (Con’t)
❖ Often engineers must select and implement from multiple
alternatives..
❖ Understanding and applying time value of money, economic
equivalence, and cost estimation are vital for engineers
❖ A proper economic analysis for selection and execution is a
fundamental task of engineering.. 1 of company submit 3
tender, which are 3BQ...which one the best price??
1-5
1.2 Role of engineering economic
analysis in decision making
• Choosing the best design for a high-efficiency gas furnace.
• Selecting the most suitable robot for a welding operation on an
automotive assembly line.
• Making a recommendation about whether jet airplanes for an overnight
delivery service should be purchased or leased.
• Determining the optimal staffing plan for a computer help desk.
• Determing labour …pekerja asing or tempatan
• Progress Report..Interim payment, S-Curve
• Bidding (BQ)…the best price to select contractor
• Hire purchase..machineries
1.3 SEVEN (7) fundamental principles
of engineering economy.
1) Develop the alternatives
Carefully define the problem, then the choice (decision) is
among alternatives. The alternatives need to be identified
and then defined for subsequent analysis.
Problem
1.Sinkholes 2. Crack
2 Focus on the differences Choose expected decision alternative (2) & (3)
only the differences in expected future
2. Redesign, sampling & lab testing for others action approval from
outcomes among the alternatives are relevant
authorities
to their comparison and should be considered
in the decision. 3. New improvement technologies
2. Redesign, sampling & lab testing for others action approval from authorities
3 Use a consistent viewpoint a. melibatkan masa untuk merekabentuk & menyiapkn
the prospective outcomes of the alternatives, laporan serta mendapatkan kelulusan oleh pihak
berkuasa tempatan.
economic and other, should be consistently b. melibatkan kos dan pekerja mahir bagi membuat
developed from a defined viewpoint penyelenggaraan
(perspective) 3. New improvement technologies
a. menggunakan TB Machine jenis Variable Density
bukan jenis Earth Pressure Balance for different soil
condition.
b. menggunakan pekerja mahir yang dilatih khas
c. menggunakan bahan yang mempunyai kekuatan
tinggi
No Principle of eng. economy Example issue
2. Redesign, sampling & lab testing
4 Use a common unit of measure • R/Bentuk semula & kelulusan ambil masa yang lama
using a common unit of measurement to enumerate as • Kos yang tinggi
• pekerja mahir yang terlatih
many of the prospective outcomes as possible will
simplify the analysis of the alternatives. 3. New technologies to prevent Crack – Steel fibre
Constructive:
•Less material cost
•Labor reduction
•Less human error
Structural:
•Smaller crack width openings
•Higher durability
•Higher impact and abrasion resistance
•Higher fatigue strength
•Improved fire resistance properties
1-15
No
EXAMPLE:
Decision Making Processes Example issue
1-16
1.5 Steps in an Engineering
Economy Study
17
Problem description
Objective Statement
Available data
Alternative for One or more approaches to meet objectives
solutions
Expected life
Cash flows and other estimates Revenues
Costs
Taxes
Measure of worth criterion Project financing
PW, ROI, B/C etcs.
1-18
Maths application in engineering economy
• Engineering Economy involves
– Formulating .. v=P x L x t
– Estimating, ..slab
– Evaluating …how many mixer lorry want to order???
expected economic outcomes of alternatives
designed to accomplish a defined purpose
• Easy-to-use math techniques simplify the evaluation,
– eg : Teorem Pithagoras
• Estimates of economic outcomes can be deterministic or
stochastic in nature.
– eg : Progress Curve (S-curve)
1-19
Electronic spreadsheets are a powerful tools in
engineering economic analysis
• Most engineering economy problems can be formulated and
solved using a spreadsheet.
• Large problems can be quickly solved.
• Proper formulation allows key parameters to be changed.
• Graphical output is easily generated.
• Give example of spreadsheets that engineer use in design for
civil engineering???
Assignment 1
1.Find one (1) problem economic issues
related on
building/construction/environment/
structure/materials/road & drainage/
others activities.
2. Solve the problem follows the
i. Principle of eng economy
ii. Decision making process.