ENGR330

Engineering
Economics
Lecture 1
Mohammed
El-Abd
Outline
General
Information
Introduction
Why Engineering
Economics?

ENGR330
Engineering Economics
Lecture 1

What is
Engineering
Economics?
Examples

Mohammed El-Abd

Principles of
Engineering
Economy
Fundamentals

Design
Process

February 2nd , 2016

Analysis Procedure

February 2nd , 2016

ENGR330
Engineering
Economics
Lecture 1

Outline

Mohammed
El-Abd
Outline

General Information

Introduction

Principles of Engineering Economy

Design Process

General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

February 2nd , 2016

ENGR330
Engineering
Economics
Lecture 1

Outline

Mohammed
El-Abd
Outline

General Information

Introduction

Principles of Engineering Economy

Design Process

General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

February 2nd , 2016

ENGR330
Engineering
Economics
Lecture 1
Mohammed
El-Abd
Outline
General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?

General Information
ENGR330
Instructor:
Mohammed El-Abd
email: melabd@auk.edu.kw
office: A210,
ext. 3725,

Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process

Textbook:
Engineering Economy, 16th edition,
Sullivan W., Wicks E. and Koelling C.,
Pearson, 2015.

Analysis Procedure

February 2nd , 2016

ENGR330
Engineering
Economics
Lecture 1
Mohammed
El-Abd
Outline

General Information
ENGR330
Marking scheme:

General
Information

Attendance (5%),

Introduction

Assignments (15%),

Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

February 2nd , 2016

Midterm Exams (40%),

Final Exam (40%).

Office hours:
UTR: 11:00 am - 12:00 pm,
UTR: 02:00 pm - 03:00 pm.

ENGR330
Engineering
Economics
Lecture 1

Outline

Mohammed
El-Abd
Outline

General Information

Introduction

Principles of Engineering Economy

Design Process

General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

February 2nd , 2016

ENGR330
Engineering
Economics
Lecture 1
Mohammed
El-Abd

Introduction
Why Engineering Economics?

Outline
General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

February 2nd , 2016

The purpose of this course is to develop and illustrate

the principles and methodology required to answer the
basic economic question of any design:
Do its benefits exceed its costs?
The Accreditation Board for Engineering and
Technology (ABET):
Engineering is the profession in which a knowledge of
the mathematical and natural sciences gained by study,
experience, and practice is applied with judgement to
develop ways to utilize, economically, the materials
and forces of nature for the benefit of mankind

ENGR330
Engineering
Economics
Lecture 1
Mohammed
El-Abd
Outline
General
Information
Introduction

Introduction
Definition
Engineering economy involves the systematic
evaluation of the economic merits of proposed
solutions to engineering problems.

Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

February 2nd , 2016

Solutions to engineering problems must:

Promote the well-being and survival of an organization,
Embody creative and innovative technology and ideas,
Permit identification and scrutiny of their estimated
outcomes,
Translate profitability to the bottom line through a valid
and acceptable measure of merit.

ENGR330
Engineering
Economics
Lecture 1
Mohammed
El-Abd

Introduction
Examples

Outline
General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

Engineering economy plays a role in many types of

situations:
Choosing the best design for a high-efficiency gas
furnace,
Selecting the most suitable robot for a welding
operation on an automotive assembly line,
Making a recommendation about whether jet airplanes
for an overnight delivery service should be purchased
or leased,
Determining the optimal staffing plan for a computer
help desk.

From these examples, it should be obvious that

engineering economy include significant technical
considerations.
February 2nd , 2016

ENGR330
Engineering
Economics
Lecture 1

Outline

Mohammed
El-Abd
Outline

General Information

Introduction

Principles of Engineering Economy

Design Process

General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

February 2nd , 2016

10

ENGR330
Engineering
Economics
Lecture 1

Principles of Engineering
Economy

Mohammed
El-Abd
Outline

Fundamental Principles

General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?

There are seven fundamental principles of engineering

economy:
Develop the alternatives,
Focus on the differences,

Examples

Principles of
Engineering
Economy

Use a consistent viewpoint,

Use a common unit of measure,

Fundamentals

Design
Process
Analysis Procedure

Consider all relevant criteria,

Make risk and uncertainty explicit,
Revisit your decisions.

February 2nd , 2016

11

ENGR330
Engineering
Economics
Lecture 1

Outline

Mohammed
El-Abd
Outline

General Information

Introduction

Principles of Engineering Economy

Design Process

General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

February 2nd , 2016

12

ENGR330
Engineering
Economics
Lecture 1
Mohammed
El-Abd
Outline

Design Process
Analysis Procedure
Engineering economic analysis procedure:

General
Information

Problem definition,

Introduction
Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy

Development of alternatives:
Done through:
Searching for potential alternatives,
Screening them, to select a smaller group of feasible
alternatives.

Fundamentals

Design
Process
Analysis Procedure

February 2nd , 2016

How?
Classical brainstorming,
Nominal Group Technique (NGT).

13

ENGR330
Engineering
Economics
Lecture 1
Mohammed
El-Abd
Outline

Design Process
Analysis Procedure
Engineering economic analysis procedure:

General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

February 2nd , 2016

Development of prospective outcomes:

What will happen if a particular alternative is
implemented?
Selection of a decision criterion,
Analysis and comparison of alternatives,
Selection of the preferred alternative,
Performance monitoring and post-evaluation of results.

14

ENGR330
Engineering
Economics
Lecture 1

Design Process

Mohammed
El-Abd
Outline
General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

Table 1.1
February 2nd , 2016

15

ENGR330
Engineering
Economics
Lecture 1

Design Process

Mohammed
El-Abd
Outline
General
Information
Introduction
Why Engineering
Economics?
What is
Engineering
Economics?
Examples

Principles of
Engineering
Economy
Fundamentals

Design
Process
Analysis Procedure

Figure P1-15
February 2nd , 2016

16