Engineering Economics and Estimation PDF

University of Kurdistan Hewlêr Engineering Economics and Estimation Assoc Prof Dr JAWDAT TASHAN, PhD, PEng, VM-ACI (440F), M-ASCE, MIEAust, FAHE Associate Professor in Civil Engineering 2024 -2025  OBJECTIVES Gives Civil Engineers an understanding of the econom...

University of Kurdistan Hewlêr Engineering Economics and Estimation Assoc Prof Dr JAWDAT TASHAN, PhD, PEng, VM-ACI (440F), M-ASCE, MIEAust, FAHE Associate Professor in Civil Engineering 2024 -2025  OBJECTIVES Gives Civil Engineers an understanding of the economic fundamentals and realities of the commercial world. Helps Civil Engineers understand the basis for decision making in the industry. To provide the knowledge of basic tools and methodology of estimating and costing of a construction work. The main aims of this module are: 1. Define economic terminology utilized within the engineering industry. 2. Analyze the market forces of supply and demand and evaluate the implications of elasticity. 3. Calculate opportunity cost in engineering decision-making processes. 4. Examine externalities in the engineering industry and formulate policies to internalize them. 5. Apply the concept of time-value of money to engineering projects and justify the importance of project planning. 6. Develop the skills necessary for systematic problem-solving in construction cost estimation. 7. Develop Take-off skills and BOQ 2 TEXTBOOKs Panneerselvam, R (2016) Engineering Economics, PHI Learning Anderton, A (2008) Economics, Pearson Education, ISBN 978 1 4058 9235 3 Dutta , B.N. , " Estimating and Costing " , S. Dutta & Company , Lucknow- 28th ed 3  LEARNING AND TEACHING RESOURCES YouTube Channel: Crash Course on Economics 4 5 BIOGRAPHY J a w d a t.Ta s h a n @ u k h. e d u. k r d Dr Jawdat Tashan completed Dr Tashan held teaching and Dr Tashan has vast experience his PhD at Swinburne research positions at Monash in engineering construction, University, Melbourne, University and Swinburne consultation, and design. He Australia. He worked as an University of Technology. His successfully designed and Associate Professor of Civil research interests lie in the managed more than 20 Engineering at Metro College area of structural strength engineering megaprojects. of Technology, Toronto, assessment, nanotechnology Notable award for completing Canada. At the same time, he and advanced composite projects (US$ 1.0 Billion) within served as the Dean of materials. Dr Tashan budget, on schedule, and Academic Affairs of the published many papers in hi- successfully met the college. In 2022, Dr. Tashan IF journals and conferences. stakeholders’ objectives. joined the UKH. Currently he He has received numerous serves as Director of the Civil performance awards during Engineering Program. his academic career.  WHAT IS ECONOMICS? Economics is the science that deals with the production and consumption of goods and services and the distribution and rendering of these for human welfare. Scarcity and the choice of WHAT, HOW, and FOR WHOM to produce are the economical big questions. 6 WHAT IS ECONOMICS? Adam Smith (1723–1790) introduced the idea that the division of labor led to the great prosperity of Britain defined the wealth of a nation as the sum of the goods produced by its people 7 ECONOMIC GOALS A high level of employment Price stability Efficiency An equitable distribution of income Growth FLOW IN AN ECONOMY 9  LAW OF SUPPLY AND DEMAND it is clear that when there is a decrease in the price of a product, the demand for the product increases and its supply decreases. 10  FACTORS INFLUENCING DEMAND Income of the people Prices of related goods Tastes of consumers 11  FACTORS INFLUENCING SUPPLY Cost of the inputs Technology Weather Prices of related goods 12  ECONOMIC EFFICIENCY Economic efficiency is the ratio of output to input of a business system. 13  Historically, as the Engineering economics kinds of projects deals with the methods engineers worked on that enable one to take evolved and economic decisions technology provided towards minimizing costs more than one way and/or maximizing benefits of solving technical to business organizations. ENGINEERING problems, engineers were more often ECONOMICS faced with having to It can be defined as the science that deals with choose among techniques of quantitative alternative solutions analysis useful for to a problem. In selecting a preferable another term, make alternative from several decisions. technically viable ones. THE STUDY OF DECISIONS 15  IT IS NOT ONLY ABOUT MONEY Choosing the least expensive alternative, though, is not the entire story. Though a 16 project might be technically feasible and the most reasonably priced solution to a problem, if the money isn’t available to do it, it can’t be done. The engineer has to become aware of the financial constraints on the problem, particularly if resources are very limited. In addition, an engineering project can meet all other criteria, but may cause detrimental environmental effects. Finally, any project can be affected by social and political constraints.  AS A CIVIL ENGINEER YOU WILL NEED TO MAKE DECISIONS EVERY DAY How often should I Should I hire a crane to inspect the bridge? build this three-storey building? How high should the Should I buy tiles dam be? locally or import from Turkey? Should I build the road out Should we buy another of concrete or asphalt? diesel generator, or make the mall more energy efficient? This module will help you make these decisions 17  EXAMPLE Hassan is designing a house for his family. He does not know whether to build the house out of A) Breeze blocks or B) Earthen blocks. Build Cost: $150000 Build Cost: $300000 Life Expectancy: 25 years Life Expectancy: 40 years Electricity Bill: $3800 p.a. Electricity Bill: $1200 p.a. What should he build the house out of? 18 EXAMPLE The New Administrative Capital: There is a substantial undertaking to build a new capital city in Cairo, Egypt, and has been in the works since 2015. The new city will be built 45 kilometers (28 miles) east of Cairo, just beyond the Second Greater Cairo Ring Road, and midway to the maritime city of Suez. According to the proposals, the city will house the major government agencies, ministries, and foreign embassies and serve as Egypt's new administrative and financial capital. Discuss the project. 19  DISCUSSION QUESTION Which of the following has the most value and utility to your family? A. Automobile B. Kitchen appliances C. Television A. A B. B C. C 0% 0% 0% A B C 20  In which of the following situations would engineering economics analysis play a strong role, and why? (a) Buying new equipment (b) Changing design specifications for a product (c) Deciding on the paint color for the factory floor (d) Hiring a new engineer (e) Deciding when to replace old equipment with new equipment PROBLEMS of the same type (f) Extending the cafeteria business hours (g) Deciding which invoice forms to use (h) Changing the 8-hour work shift to a 12-hour one (i) Deciding how much to budget for research and development programs (j) Deciding how much to donate for the town’s new library (k) Building a new factory (l) Downsizing the company 21 Q&A 22