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Questions and Answers
What is engineering economy defined as?
Engineering economy is the branch of economics that involves the application of definite laws of economics, theories of investment, and business practices to engineering problems involving cost.
What are the assessment methods in engineering economics?
What is the primary purpose of engineering economy?
The primary purpose of engineering economy is to seek new objectives for the application of engineering.
Engineering economy involves the study of cost features and other financial data.
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Engineering economics provides basic principles and laws for _______ and _______.
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Study Notes
Introduction to Engineering Economy
- Engineering economy is the branch of economics that applies economic laws, theories, and business practices to engineering problems involving cost.
- It is the study of economic theories and their application to engineering problems, aiming to obtain the maximum benefit at the least cost.
Definition of Engineering Economy
- Engineering economy is equated with practicality and economic feasibility.
- It is the systematic evaluation of the economic merits of proposed solutions.
Important Uses of Engineering Economy
- Seeking new objectives for engineering applications.
- Discovering factors limiting the success of a venture or enterprise.
- Comparing alternatives as a basis for decision-making.
- Analyzing possible investment of capital.
Principles of Engineering Economy
- Principle 1: Develop the alternatives.
- Principle 2: Focus on the differences.
- Principle 3: Use a consistent viewpoint.
- Principle 4: Use a common unit of measure.
- Principle 5: Consider all relevant criteria.
- Principle 6: Make uncertainty explicit.
- Principle 7: Revisit your decisions.
The Engineering Economic Analysis Procedures
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- Problem recognition, definition, and evaluation.
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- Development of the feasible alternatives.
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- Development of the cash flows for each alternative.
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- Selection of a criterion (or criteria).
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- Analysis and comparison of the alternative.
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- Performance monitoring and post-evaluation results.
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Description
This quiz covers the basics of engineering economics, introducing students to the fundamental concepts and principles of economic decision-making in engineering.
