ISE 307 Engineering Economic Analysis

Catalog description Introduction to concepts of economic decision-making from a cash flow viewpoint. It includes present worth analysis, cash flow equivalence, rate of return, replacement analysis, cost-benefit analysis, project cash flow analysis, and sensitivity analysis.

Course objectives

  • Develop students' awareness of the concepts of cash flow approach, time value of money, product/project costing and rate of return.
  • Introduce students to the process of integrating engineering proposals with economic analysis in order to select among several viable alternative projects.
  • Understand and appreciate the models and measures used in decision making in the area of engineering economics.

Topics

 

Reference Chapters 

 Number of Lectures
Introduction to engineering economic analysis 1 1.5
Time Value of Money 2 5
Interest calculations 3 1
Equivalence Calculations under Inflation 4 4
Present Worth Analysis 5 3
Annual Equivalence Analysis 6 3
Rate of Return Analysis 7 6
Handling Project Uncertainty 10 4.5
Replacement Decisions 11 4.5
Benefit Cost Analysis 12 4

Course Contribution to ABET Program Outcomes

ABET Program Outcomes Course contribution
Ability to apply knowledge of mathematics, science, and engineering Low
Ability to design and conduct experiments as well as to analyze and interpret data  
Ability to design a system, component, or process to meet desired needs Medium
Ability to function on multidisciplinary teams Low
Ability to identify, formulate, and solve engineering problems Low
Have an understanding of professional and ethical responsibility  
Have the ability to communicate effectively Medium
Have the broad education necessary to understand the impact of engineering solutions in a global/societal context Low
Have a recognition of the need for and an ability to engage in lifelong learning  
Have a knowledge of contemporary issues  
Have the ability to use the techniques, skills, and modern engineering tools necessary for engineering practice Low

Prerequisites Junior standing

References

Method of assessment

Homework 20
Quizzes 2 @ 5 (July 19 and Aug 16)
Midterm exam 30 (Aug 2, 2008 in class)
Final exam 30
Project 10
Total 100

Computer usage

  • There will be a number of homework assignments and case studies that will be solved through Excel.
  • Every student should activate his Blackboard account. The course account will host the essentials of the course, such as the lecture notes, due dates, assignments, etc.

Important Notes

  • The duration of the class is just right to cover the course material. Any effort to disturb the flow of the class will not be accepted. Hence, no makeup of any kind will be given; so it is encouraged that students come to class to take the quiz and, if they have to, can leave the class.
  • Homework assignments have to be submitted during the class of the due date. Assignments can be submitted one day early if you cannot come to class or you can give it to someone who can submit the assignment in class.
  • The attendance will be taken at random days. Following this arrangement, excuses will not be accepted.

Sample Exam

Term Summer 2008

Instructor Dr Muhammad Bin Fahad Al-Salamah, Office: 22/436, Phone: 1627, email: salamah @kfupm.edu.sa

Office Hours every day from 2 to 3pm

Institution Industrial and Systems Engineering Systems Engineering Department

 

الوصف: مقدمة لمفاهيم صنع القرار الاقتصادي من وجهة نظر التدفق النقدي. ويشمل هذا القيمة الحالية، والتدفقات النقدية المعادلة ، ومعدل العائد، والاستبدال من منظور اقتصادي، تحليل التكاليف والمنافع، وتحليل التدفقات النقدية للمشروع، وتحليل الحساسية.

المادة: الاقتصاد الهندسي
مدرس المادة: الدكتور محمد بن فهد السلامة

برنامج هندسة النظم الصناعية
قسم هندسة النظم
جامعة الملك فهد للبترول و المعادن