Business Economics and Analysis Quiz

Business for Engineering

• This course is for engineering students
• Engineering is about problem-solving
• Senior projects are often excellent solutions needed by many people
• Students and teachers commonly neglect the business potential of senior projects, leaving them on shelves
• The course teaches students to transform solutions into businesses

What topics should engineers know about business?

• Introduction to Business Concepts
• Business terms
• Business models and strategies
• Management concepts
• Financial management
• Project management
• Innovation and entrepreneurship
• Marketing
• Leadership
• Ethics
• Laws

Business for Engineers:

• The course's purpose
• Why students need this course
• Engineers' role in business
• Projects can be transformed into businesses

Why do you need it?

• Students are being prepared to start and own a business
• Conversion of ideas to projects to businesses
• Learn leadership, management, and initial steps to achieve goals
• Develop projects to become businesses by understanding steps

Role of Engineers in Business

• Engineering plays a role in all sectors of the economy
• Examples of sectors: real estate, automotive industry, technology, organizations, appliances, machines, military, medicine, agriculture, food industry (petrol, gas, sun, wind)

What is a Business?

• A transaction cycle that generates profit (usually through products or services)
• Key business functions include management, finance, marketing, sales, and accounting
• Profitable projects, deals, and investments
• Something that makes you money (positive return)
• Value is measured by more than just money (e.g., $, NIS, JD, Gold, Silver, Commodities, Assets, Real Estate)

Business aspects

• Management: planning, human resource management, small business management, large business management, and leadership
• Finance (Accounting, Sales)
• Marketing (Getting new customers)
• Operations (Raw material to product)

What to expect at the end of the course

• Ability to understand what a business is
• Ability to plan a business from an idea
• Ability to study the market and make informed decisions
• Steps to plan and start a business using the business canvas model

Chapter 1: Understanding the U.S. Business System

• A discussion on the U.S. economy's core principles.
• "In business you get what you want by giving other people what they want." - Alice Foote MacDougall. Quotes the importance of understanding customers wants.
• Nature and goals of US business are defined.
• Global economic systems are described and how they affect production.
• Demand and supply are explained.
• Elements of private enterprise and its competition are outlined.
• Evaluation of an economic system is discussed.
• Details on projections for the future U.S. economy

What is Business?

• An organization providing goods and services to generate profits
• Profits are the difference between revenues and expenses

Factors of Production

• Labor
• Capital
• Information Resources
• Physical Resources
• Entrepreneurs

How are factors of production allocated?

• Planned Economy: The government owns and operates all production means.
• Market Economy: Buyers and sellers interact based on choices.
• Mixed Economy: Combines features of planned and market economies.

Circular Flow in a Market Economy

• Firms supply products in output markets and demand resources in input markets.
• Households demand products in output markets and supply resources in input markets.

Capitalism

• Individuals make decisions about where to work, what to buy, and how much to pay.
• Producers make decisions about whom to hire, what to produce, and how much to charge.
• Government supports private ownership and encourages entrepreneurship.

Mixed Economies: Planned and Market

• Most countries' economies have elements from both planned and market systems.
• There's a global trend toward more market-based elements.

Supply and Demand Drive the U.S. Economic System

• Supply: The willingness of producers to offer a good or service for sale.
• The law of supply: Producers offer more at higher prices and less at lower prices
• Demand: The willingness of buyers to purchase a good or service.
• The law of demand: Buyers demand more at lower prices and less at higher prices
• Demand and Supply schedules of various prices relating to the quantity demanded/supplied

Demand and Supply (continued)

• Demand and Supply curves representing price relation to the quantity of goods.
• Equilibrium price is identified on the curve.

The U.S. Economy is a Private Enterprise System

• Core elements of a private enterprise system in the U.S. are outlined
• Private Property Rights
• Freedom of Choice
• Profits
• Competition

Competition

• Competition motivates businesses to offer better or cheaper products.

Understanding Economic Performance

• Key concepts are detailed
• Business Cycle
• Aggregate Output
• Gross Domestic Production (GDP)
• Standard of Living
• Gross National Product (GNP)
• Productivity
• Balance of Trade
• National Debt
• Economic Stability
• Inflation
• Unemployment

U.S. GDP and GDP per Capita

• Data illustrating U.S. GDP and GDP per capita
• Graphs displaying relationship over time

GDP and GDP per Capita (Continued)

• Definition of GDP and GDP per capita, highlighting their usage in evaluating economic well-being
• Graphs displaying relationship over time to show growing GDP/GDP per capita over the years.

Recessions and Depressions, Managing the US Economy, Looking to the Future, Projections and Implications for the U.S. Economy

• Recession/Depression definitions
• Economic Stabilization Policy/ Government policy designed to ease economic changes
• Fiscal and Monetary Policies
• Information revolution, breakthroughs in tech., globalization

Key Takeaways from Projections and Implications for the U.S. Economy

• Economic opportunities like steady growth and lower deficits
• Economic challenges in a global market like trade deficit and income inequality/ debt/ health insurance.

Chapter Review

• Summary of core concepts/topics from the chapter
• Nature and goals of U.S. business, global economic systems, demand and supply, private enterprise/competition.
• Evaluation of economic performance is emphasized
• Projections for the future U.S. economy

Business for Engineering:

• The role of Engineering in Business
• Roles of Engineering in Business (New Product Development, Enhancement of Existing Product, Maintenance)
• Problems (Need for Change, Expansion of existing system, fixing bugs)
• Science & Technology (study of natural objects using observation & experimentation)
• Engineering (Creating Solutions, Effective Management, Project Planning, Problem Solving, Critical Thinking, Attention to detail, Teamwork, Communication, Mathematical background)
• Invention vs Innovation
• Entrepreneurship (Ability to start a business and take risks)
• Added Value
• Sources of Innovation

Market Analysis

• Market Analysis process; understanding market size, trends, competition, and customer needs
• Importance of analysis for business decisions and to understand customers and competitors.
• Key components: Market Size, Market segment, History and Growth rate prediction
• Key components (Market Trends, SWOT Analysis, Tools/Methods) and importance of analysis
• Research Methods(Primary/Formal
• SWOT Analysis(Strengths, Weaknesses, Opportunities, Threats)

Money 101: Financial Basics for Engineers

• Financial literacy's importance to engineers
• How financial skills complement technical skills
• Money matters for Engineers, Personal Finances, Time Value of Money (TVM), Cost/Benefit Analysis
• Opportunity Cost
• Career and Financial planning
• Money Rules (earning money, paying off debt, rule of 80/20, diversification, investing for the long term, asset vs liability, helping others)

Time Value of Money (TVM)

• The concept that now money is worth more than same amount in the future. Money can increase in the future with compounding interest or decrease due to inflation
• Present Value/ Future Value
• Interest Rate
• Number of periods
• TVM formula

Cost-Benefit Analysis (CBA)

• Systematic approach for evaluating financial and non-financial outcomes of a project or decision
• Key for engineering projects (NPV, IRR)
• Example: calculating project investment returns

Opportunity Cost

• The potential benefits missed when choosing one alternative over another
• Understanding trade-offs in financial decisions

Career and Financial Planning

• Techniques for effectively negotiating salaries (e.g., evaluating job offers, negotiation tips)
• Importance of early retirement planning, overview of retirement accounts (e.g., 401k, IRA)

How to add value to an existing product with a specific example in the course.

Payment Systems

• Payment systems as a discussion (Local, International, Cash, Cheques -deferred funds, Credit cards, Debit cards, Online banking, PayPal, Apple Pay, Google Pay, Items (Barter), Crypto currencies, Wallet)
• Payment mechanisms (ways of transferring funds between parties; physical and electronic methods)
• Payment Parties (Payer, Payee, Third party)
• Payment balance, Trade deficit(Economic decline)

Payment Regulations

• Payment system regulations (strict rules for security, SWIFT, Cryptocurrencies)

Security Issues in Payment Systems

• Authentication mechanisms for payment security

Incubators

• Organizations/centers that help startups to establish business and connect to finance sources.
• Services (Minimize risks, office space, networking, training, help with business plans, legal support, funding access)
• Idea validation(pre-incubation), business startup (incubation), and successful company (Post incubation)
• Incubator gains (investment funds, community/social contribution, networking/influence)