Foundamentals

Question 1

Engineering economy definition

Answer 1

Engineering economics, previously known as engineering economy, is a subset of economics concerned with the use and “…application of economic principles” in the analysis of engineering decisions.

Question 2

What is the purpose of this class

Answer 2

The purpose of this class is to develop and illustrate the principles and methodology required to answer the basic economic question

Do the benefits exceed its costs

Question 3

Why is the engineering economy important to engineers

Answer 3

• Engineers design and create
• A proper economic analysis for selection and execution is a fundamental aspect of engineering

Question 4

Solutions to engineering problems must

Answer 4

1 Promote the well being and survival of an organization

2 embody creative and innovative tech and ideas

3 translate profitability to the bottom line through a valid and acceptable measure of merit

Question 5

What kind of problems can you evaluate with engineering economy

Answer 5

1 personal ( economic decision)

2 professional

Question 6

Example of personal eng economy problems

Answer 6

1 buying a car

2 paying off loans

3 make investments

Question 7

Example of professional eng economy problems

Answer 7

1 justify new projects

2 find the value of capital

3 evaluate alternative plans

4 every time you need to sell something upper management

Question 8

engineering economic analysis can play a role in many situations.

for example

Answer 8

1 choosing the best design for a high-efficiency gas furnace

2 selecting the most suitable robot for a welding operation

Question 9

7 fundamental principles of engineering economy

Answer 9

1 develop the analysis

2 focus on the differences

3 use a consistent viewpoint

4 use a common unit of measurement

5 consider all relevant criteria

6 make uncertainty explicit

7 revisit your decisions

Question 10

Answer 10

Question 11

Answer 11