Engineering Economic Analysis Procedure
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Questions and Answers

What factors, other than economic aspects, play a significant role in the final recommendation of a decision?

  • Employee satisfaction and customer service
  • Production flexibility and environmental compliance
  • Public relations and community involvement
  • All of the above (correct)

    • Which step in the decision-making process involves the selection of the alternative that best serves the long-term interests of the organization's owners?

  • Step 6: Final decision implementation
  • Step 5: Analysis and comparison of alternatives
  • Step 3: Development of prospective outcomes
  • Step 4: Selection of decision criterion (correct)

    • What does the analysis of the economic aspects of an engineering problem mainly rely on?

  • Cash-flow estimates for feasible alternatives (correct)
  • Historical data and intuitive guesswork
  • Consideration of future uncertainties
  • Detailed study of all competitors' financial reports

    • Why is obtaining accurate forecasts of cash flows and other factors considered a substantial effort?

    <p>To account for inflationary pressures and regulatory mandates</p> Signup and view all the answers

    Which principle is considered essential in an engineering economy study due to future uncertainties?

    <p>'Consideration of future uncertainties'</p> Signup and view all the answers

    What is the main focus when selecting an alternative in engineering economy according to the text?

    <p>Long-term interests of the organization's owners</p> Signup and view all the answers

    What stimulates the recognition of a problem according to the text?

    <p>Internal and external organizational needs</p> Signup and view all the answers

    In Step 2, what does 'feasible' mean in the context of developing alternatives?

    <p>Meeting or exceeding established requirements</p> Signup and view all the answers

    Which step uses Principles 2, 3, and 4 of the Engineering Economy Principles according to the text?

    <p>Step 3: Development of Prospective Outcomes</p> Signup and view all the answers

    How are alternatives selected for detailed analysis in Step 2?

    <p>Meeting or exceeding established requirements</p> Signup and view all the answers

    What is the purpose of comparing alternatives in engineering economic analysis?

    <p>To identify the differences between alternatives</p> Signup and view all the answers

    What defines the boundary or extent of a problem formulation according to the text?

    <p>Systems perspective</p> Signup and view all the answers

    What may change the original formulation of a problem during evaluation?

    <p>Information from the evaluation phase</p> Signup and view all the answers

    Which step is the preferred alternative a result of?

    <p>It is not a result of any specific step</p> Signup and view all the answers

    What does the quality of the results obtained and the recommended course of action depend on?

    <p>The total effort put into the analysis</p> Signup and view all the answers

    What does Principle 7 relate to in engineering practice?

    <p>Monitoring project performance during its operational phase</p> Signup and view all the answers

    Why is post-implementation evaluation important according to the text?

    <p>To learn how to do better analyses in the future</p> Signup and view all the answers

    Why is the final step often not done consistently or well in engineering practice?

    <p>Inadequate attention given to follow-up and feedback</p> Signup and view all the answers

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