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Engineering Economics

This document provides a course syllabus for Engineering Economics. The instructor's name and contact information are listed. The course covers basic economic analysis from an engineering perspective to help students identify the best alternative based on economic considerations. Students will learn to apply mathematical and economic principles to engineering problems. Assessment includes a midterm exam, final exam, group assignment, and individual assignments. The course outline lists 16 units covering topics like time value of money, equivalence, inflation, alternatives analysis, and decision-making under risk and uncertainty.

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266 views

Engineering Economics

This document provides a course syllabus for Engineering Economics. The instructor's name and contact information are listed. The course covers basic economic analysis from an engineering perspective to help students identify the best alternative based on economic considerations. Students will learn to apply mathematical and economic principles to engineering problems. Assessment includes a midterm exam, final exam, group assignment, and individual assignments. The course outline lists 16 units covering topics like time value of money, equivalence, inflation, alternatives analysis, and decision-making under risk and uncertainty.

Uploaded by

Sisay AD
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Defence Engineering College

Department of Basic and Applied Courses


Course Syllabus
1. Instructor Information
Name
Office Location
Phone Number
E-mail
Office Hours

Yalew Mekonnen
Administration building office No. 46
0114338400 ext. 148
[email protected]

2. Course Information
Engineering Economics
EC 3110
3-30
AE 5412
3. Course Description
Aim: this course covers the basic of economic analysis from an engineering perspective.
Because cost is such an important component in decision-making various techniques for
comparing alternatives on an economic basis are presented. After completing the course, the
student should be able to identify which alternative should be selected form two or more
mutually exclusive alternatives on the basis of economic considerations.
Course Name
Course Code
Credit hours
Prerequisite

Description:
Introduction to engineering economy, interest formulas & equivalence, economic analysis of
alternatives, accounting depreciation & income taxes, estimating risk & uncertainty
4. Learning Outcomes
After the completion of the course the student will have the
following attributes:
4.1 Knowledge
4.1.1
Students learn to apply knowledge of mathematics, economics and
engineering principles to solve engineering problems.
4.1.2
Students develop an understanding of managerial accounting and economic
principles
4.2 Intellectual and Practical skills
4.2.1
Students learn to use appropriate techniques, skills and tools to identify,
formulate, analyze, and solve engineering economic problems using computer
tools such as spreadsheets.
4.2.2
Students get practice in writing clearly, using graphics effectively, and
justifying solutions to engineering economics problems.
4.3 Attitude and behavior
4.3.1
Appreciate the economics in an engineering environment and especially in
defence industries and field organizations.
4.3.2
Develop competent capabilities to ensure optimization in utility of scarce
resources, besides ensuring quality output.
5. Method of Instruction
3 fifty minutes lecture hours every week
Class lectures
Active learning (involves the full participation of

Tutorial
Study of lecture notes
Demonstrations
Lab assignments
Group Assignment

students)
Teach inductively and to be followed by deductive
assertions

Assignments as home work


Hold discussions on assignments

This is fully the responsibility of the learner


Will be given by the Technical assistant/Instructor
Spread sheet and soft ware based assignments in computer lab
Work in groups of not more than 4
members.
Recognize individual contribution.
Not applicable.

Project

6. Course Outline
Week
Chapter

Subject matter contents

Unit I
1(3
hrs)

Unit II

Unit III

Unit IV

Engineering & Engineering


economy
- Physical & economic
efficiency
- Engineering for economic
competitiveness
- Engineering economy & the
engineer

Economic & cost concepts


- Concepts of value & utility
- Economic aspects of
exchange
1 (3hrs)
- Life cycle cost
- Time value, earning &
purchasing power of money
Interest formulas
-Cash flows over time
1(3hrs) -Interest formulas & relationships
-Compounding frequency
considerations
Calculations of economic
equivalence
1(3hrs) -Principles of equivalence
-Equivalence calculations
involving cash flow
-Equivalence calculations
involving bonds, loans &
working capital

Learnin
g
Outcom
es

Assignments/activity
(Tutorial hours)

4.1

4.1& 4.2

4.1& 4.2

4.1& 4.2

Assignment

Assignment

Assignment

Unit V

1(3hrs)

Unit VI

1(3hrs)

Unit VII

Unit VIII

1(3hrs)

1(3hrs)

Equivalence involving inflation


-Measures of inflation & deflation
-The inflation rate
-Effects of inflation
-Analyzing inflation in
investments
Basis of comparison of
alternatives
-Present & future worth
-Annual equivalent
-Internal rate return
-Payback period
-Capitalized equivalence amount
-Capital recovery with return
-Project balance
Decision making among
alternatives
-Types of in vestment proposals
-Forming mutually exclusive
alternatives
- Elements of decision criteria
-Comparison based on total
investment
-Capital recovery with return
-Project balance
Evaluating production operations
-Break even analysis
-Operation & production
decisions
-Economic operation of
equipment
-Models for procurement
operations

4.1& 4.2

Assignment

4.1& 4.2

Assignment

4.1& 4.2

Assignment

4.1& 4.2

Assignment

Mid Examination period


Unit IX

Evaluating replacement
alternatives
-Replacement analysis for
unequal lives
1(3hrs)
-The economic life of an asset
-Replacement assumptions &
decisions
-Retirement or abandonment
decisions

4.1& 4.2

Assignment

Unit X
1(3hrs)

Unit XI

1(3hrs)

Unit XII

1(3hrs)

Unit XIII

1(3hrs)

Unit XIV

1(3hrs)

Unit XV

1(3hrs)

Evaluating public projects


-Welfare aim of government
-Nature of public activities
-Financing public activates
-Benefit cost analysis
-Cost effective analysis
Accounting & Depreciation
accounting
-Cost accounting & depreciation
-Basic depreciation models
-Modified accelerated cost
recovery system
-Units of production
depreciation
Income taxes in economic
analysis
-Relation of income taxes to
profit
-Federal income tax for
corporations
-Effective income tax rates
-Interest, depreciation & income
tax
-Tax credits
-After tax cash flow analysis
Estimating economic elements
-Cost estimating methods &
relationships
-Adjustment of cost data
-Estimating & allocating
indirect costs
-Judgment in estimating
Estimates & decision making
-Allowances for uncertainty in
estimates
-Considering a range of
estimates
-Sensitivity analysis
Decision under risk &
uncertainty
-Criteria for decisions under
risk
-Expected value decision
making
-Expectation variance decision
making
-Monte carlo analysis
-Decision trees in decision
making

4.1& 4.2

4.1& 4.2

Assignment

Assignment

4.1& 4.2

Assignment

4.1& 4.2

Assignment

4.1& 4.2

Assignment

4.1& 4.2

Assignment

Unit XVI

Decisions involving multiple


criteria
-Direct ranking methods
1(3hrs) -Systematic elimination
-Weighting methods of
evaluation
-Decision evaluation display

Reference Books

7. Laboratory activities
No laboratory
8. Required Text and Reference
1. Thuesen GJ, Fabrycky WJ, Engineering Economy,
6th ed., Prentice Hall inc, New jersey, 1984
1. Wiilam Sullivan G, Elin M Wicks, James Luxhoj T, Engineering
Economy, 13th ed., Pearson Education inc., New Jersey, 2006
2. Donald G Newnan, Jerome p Levelle, Ted G Eschenbach,
Engineering Economic Analysis, 10 th edition, Ed wheeler
3. Jose Sepulveda , William Souder , Byron Gottfried, Schaum's
Outline of Engineering Economics, Latest edition, McGraw Hill

Software Required
Type
Mid semester Exam

Assignment

Final Examination period

18

Text Book

4.1& 4.2

Weight
25%

Final semester Exam

45%

Group Assignment

10%

Individual
assignment

10%

No required software
9. Assessment
Due date
Behavior and Criteria
th
9 week of the
Examination will be set to address
semester
learning outcomes 4.1.1, 4.1.2,
4.2.1, 4.2.2 and the criteria is to
get all questions answered
correctly
18th week of the
Examination will be set to address
semester
learning outcomes 4.1.1, 4.1.2,
4.2.1, 4.2.2 and the criteria is to
get all questions answered
correctly
14th week
Questions will be given on the 7th
week in such way that to the
following outcomes 4.1.1, 4.1.2,
4.2.1 and 4.2.2.
TBD
10. Academic Honesty

Copying from any outside sources (e.g. Fellow students, and Internet, etc.) on any material to be graded is
not permitted, and will be considered cheating. Cheating will result in failure of the assignment, failure of
the class and/or face possible disciplinary action. Each student is responsible for securing his or her work
from copying. Each student is expected to abide by college policies on academic conduct.

11. Due Date


All assignments must be turned in the class on the due date for full credit. No assignment will be
accepted after class on the due date. Since the group assignment is due in week 15, papers for
this presentation should be submitted before one week of the 15 th week. Failure of submission
and presentation of the group assignment in week 14 will be awarded as zero out of 10 points.

12. Classroom Behavior


Anything that disturbs your instructor or your colleagues during the class period is considered a
troublesome behavior. Examples include: Using mobiles, PDA, making offensive remarks, sleeping,
working on assignments related to other courses, etc. troublesome behaviors are completely prohibited.

Name

13. Approval (Affidavit)


Signature

Instructor:
Section Head:
Department Head:

Date

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