Application of principles of engineering economy for establishment of equipment and system feasibility. Interest, equivalence, taxes, depreciation, uncertainty and risk, incremental and sunk costs, and replacement models.

Prerequisites & Corequisites: Prerequisites: MATH 1230 or MATH 1710 and Junior standing.

Credits: 3 hours

Lecture Hours - Laboratory Hours: (3 to 0)

1. Differential and integral calculus. (MATH 1230).
2. Understanding and familiarity with computer programming. (Junior Standing).

At the end of the semester the student will be able to:

1. Formulate and solve time value of money problems. (a)
2. Identify sources of data and apply appropriate techniques to solve economic problems. (e)
3. Use spread sheets for solving economic problems and financial analysis. (k)
4. Understand the importance of making appropriate economic decisions. (f)
5. Recognize the impact of engineering economics decisions in a global and societal context. (h)
   

Letters in parentheses refer to the ABET EAC Criterion 3, categories a-k.

Objective 1

Formulate and solve time value of money problems [1, 2, 3, 4, 5].

Objective 2

Identify relevant and pertinent data and apply net present value and internal rate of
return methods to solve economic problems [1, 2, 3, 5].

Objective 3

Have the ability of using Excel spreadsheets for solving economic problems and analyzing and evaluating a variety of financial problems [1, 3].

Objective 4

Correctly identify the consequences of inappropriate economic decisions, with respect to after tax income [1, 5].

Objective 5

Correctly identify how engineering economics decisions impact individuals, companies,
and society in general [1, 2, 3, 5].

Numbers in brackets refer to the method of evaluation as listed in the previous section.

Newnan, Donald G., Jerome P. Lavelle, and Ted G. Eschenbach, Engineering Economic Analysis, (New York: Oxford University Press, 2009, Tenth Edition).

References:

Collier, Courtland A. and Glagola, Charles R., Enginering Economic and Cost Analysis, (Menlo Park: Addison Wesley Longman, Inc., 1998, Third Edition).
[TA177.4 .C65 1998]

Sullivan, William G., Wicks, Elin M., and James T. Luxhoj, Engineering Economy, (Upper Saddle River: Prentice-Hall, 2003, Twelfth Edition). [TA177.4 .E539 2003]

Blank, Leland T. and Tarquin, Anthony J., Engineering Economy, (McGraw Hill, 1998, Fourth Edition). [TA177.4 .B58 1998]

Dr. Bob White
Industrial and Manufacturing Engineering
Office Room E-216, Parkview Campus
Phone: 276-3379
Email: bob.white@wmich.edu