Instructors: OZIS Academy
7 sections • 30 lectures • 13h 49m total length
Video: MP4 1280x720 44 KHz | English + Sub
Updated 2/2022 | Size: 5.1515 GB

Understand Fundamentals of Engineering Economics that Enable Students to Perform Economic Analysis of Different Projects

What you'll learn
Understand major principles of economic analysis for decision making among alternative courses of action in engineering.
Apply cost estimation and alternative analysis techniques for engineering applications.
Demonstrate knowledge of cost estimation techniques and probabilistic risk analysis.
Apply the concepts and techniques of linear programming for optimization of economic resources
Evaluate and justify selection of different alternatives by using economic analysis techniques
Understand the Concepts of Time Value of Money
Understand the Concepts of Depreciation for taking decision between the Alternatives wisely.

Requirements
The course is designed for learners of all levels.
All concepts are introduced slowly and gradually, but comfort with thinking analytically will be helpful.

Description
Engineering economics, previously known as engineering economy, is a subset of economics concerned with the use and "application of economic principles" in the analysis of engineering decisions. As a discipline, it is focused on the branch of economics known as microeconomics in that it studies the behavior of individuals and firms in making decisions regarding the allocation of limited resources. Thus, it focuses on the decision-making process, its context and the environment

As a discipline though, it is closely related to others such as statistics, mathematics, and cost accounting. It draws upon the logical framework of economics but adds to that the analytical power of mathematics and statistics

Engineers seek solutions to problems, and along with the technical aspects, the economic viability of each potential solution is normally considered from a specific viewpoint that reflects its economic utility to a constituency. Fundamentally, engineering economics involves formulating, estimating, and evaluating the economic outcomes when alternatives to accomplish a defined purpose are available.

Since engineering is an important part of the manufacturing sector of the economy, engineering industrial economics is an important part of industrial or business economics. For this reason, the major courses that are covered in this course are

The economics of the management, operation, and growth and profitability of engineering firms;

Macro-level engineering economic trends and issues;

Engineering product markets and demand influences; and

The development, marketing, and financing of new engineering technologies and products.

This Course Includes the following topics.

Introduction: Engineering economy defined, measures of financial effectiveness, non-monetary factors and multiple objectives. Principles of engineering economy.

The Economic Environment: Consumer and producer goods, measures of economic worth. price, supply, & demand relationship. production. factors of production laws of return.

Cost Concepts & Analysis: Sunk & opportunity costs. fixed, variable, and incremental costs, recurring & nonrecurring costs. direct, indirect. and overhead costs, standard costs. Break-even analysis, unit cost of production, cost-benefit analysis, feasibility studies, value analysis in designing & purchasing.

Time Value of Money: Simple interest, compound interest, cash flow diagrams, interest formulas, nominal versus effective interest rate, continuous compounding.

Depreciation and Depletion: Purpose of depreciation, types of depreciation, economic life and what can be depreciated?

Comparing Alternatives: Present economy, selection among machines, materials, processes, and designs, payback period method, present worth method, uniform annual cost method, rate of return method, alternatives having identical lives, alternatives having different lives.

Linear Programming: Mathematical statement of linear programming problems graphic solution. Simplex method and duality problems.

RECOMMENDED BOOKS

(01) Engineering Economics by William G. Sullivan & James A. Bontadelli

(02) Operational Research: An Introduction by Hamdy A Taha

COURSE OUTLINE OF THIS COURSE IN DETAIL

Introduction of Economics

Introduction to Economics and Difference between Wants and Desires

Introduction to Economics

Difference between Want and Desires

Do resources fulfill wants or desires?

Macro and Micro Economics, Engineering Economics and Economic Behavior

Two Dimensions of Economics

Macro Economics

Micro Economics

Engineering Economics

Economic Environment/Behaviour

Classification of Consumer and Producer Goods

Theory and Laws of Demand and Supply

Theory of Demand and Supply

Law of Supply

Determination of Supply

Shifts in Supply

Law of Demand

Demand Schedule or Demand Curve

Determination of Demand

Shifts in Demand

Supply Function/Equation

Demand Function/Equation

Understanding the Market Equilibrium and Elasticity concepts in Economics

Market Equilibrium

Equilibrium's Mathematical Representation

Price Elasticity of Demand

Elasticity and Revenue

Special Cases of Elasticity

Market Structure and Types of Businesses

Market Structure

Types of Businesses

Understanding the Time Value of Money

Understand Simple and Compound Interest with Problems and Cash Flow Diagramming

Simple Interest

Compound Interest

Simple vs. Compound Interest

Notation and Cash Flows Diagram

Cash Flow Diagraming

Present and Future Values of Single Cash Flow

Discrete Cash Flow Examples Illustrating Equivalence

Present Equivalent of Future Amount of Money

Solving Problem related to Time Value of Money

Annuity and Deferred Annuity and Solving Example Problems related to them

Annuity

Relating a Uniform Series (Annuity) to its Present and Future Equivalence

Present Equivalent of Annuity

Solving Problems Related to the Annuity

Deferred Annuities (Uniform Series)

Present Equivalent of Deferred Annuity

Solving Problems related to Present Equivalent of Deferred Annuity

Uniform Arithmetic Gradient of Cash Flow

Gradient Problem and using Gradient Conversion for Solving Problems

Gradient Problem

Using Gradient Conversion Factor for solving Problems

Nominal and Effective Interest Rate and Concepts of APR and APY

Nominal and Effective Interest Rates

Concept of APR (Annual Percentage Rate) and APY (Annual Percentage Yield)

Time-based Units (Interest Rate Statement)

Solving Problems related to Nominal and Effective Interest Rates

Solving Problems related to Nominal and Effective Interest Rates

Derivation of Effective Annual Interest Rate

Equivalence Relation: Payment Period and Compounding Period

Effective Interest rate of any time and Financial Effectiveness and Efficiency

Effective Interest rate for any time period

Equivalence Relation (PP