ENGINEERING ECONOMICS

AIM

To introduce the basic concepts of the economic analysis of engineering and management decisions, to explain how to apply these concept in the project planning and decision making process of a firm or government

CONTENT

This course contains; Introduction to Engineering Economics,Brief Overview of Economics and Finance,Time Value of Money and Economic Equivalence,Engineering Economy Factors,Nominal and Effective Rates,Project Evaluation Methods ,Determination of Rate of Return,Resolution of Multiple Rates of Return,Decision Rules in Rate of Return Analysis ,Benefit Cost Analysis ,Capital Budgeting, Inflation and Index Numbers ,Replacement Analysis,After Tax Economic Analysis.

1. 1

   1. Understands the fundamental principles of engineering economics and their relevance to engineering practice.

   Taught by: Problem Solving Method, Self Study Method, Question - Answer Technique, Lecture Method · Assessed by: Traditional Written Exam, Homework, Quiz

2. 2

   2. Understands the basic concepts of economics and finance and explains their relationship to engineering economic analysis.

   Taught by: Problem Solving Method, Self Study Method, Question - Answer Technique, Lecture Method · Assessed by: Traditional Written Exam, Homework, Quiz

3. 3

   3. Can perform cost estimation using engineering economics terms.

   Taught by: Problem Solving Method, Self Study Method, Question - Answer Technique, Lecture Method · Assessed by: Traditional Written Exam, Homework, Quiz

4. 4

   4. Using engineering economics terminology, derives factors for calculating the time value of money.

   Taught by: Problem Solving Method, Self Study Method, Question - Answer Technique, Lecture Method · Assessed by: Traditional Written Exam, Homework, Quiz

5. 5

   5. Uses present value and different annual valuation techniques to evaluate or select alternatives.

   Taught by: Problem Solving Method, Self Study Method, Question - Answer Technique, Lecture Method · Assessed by: Traditional Written Exam, Homework, Quiz

6. 6

   6. Analyzes rate of return and incremental rate of return.

   Taught by: Problem Solving Method, Self Study Method, Question - Answer Technique, Lecture Method · Assessed by: Traditional Written Exam, Homework, Quiz

7. 7

   7. Does cost/benefit analysis of public sector projects. Uses methods for reducing the book value of capital investment, considers the effects of inflation.

   Taught by: Problem Solving Method, Self Study Method, Question - Answer Technique, Lecture Method · Assessed by: Traditional Written Exam, Homework, Quiz

WEEKLY PLAN

1. WEEK 1

   Introduction to Engineering Economics

   Preparation: Lecture Notes

2. WEEK 2

   Brief Overview of Economics and Finance

   Preparation: Lecture Notes

3. WEEK 3

   Time Value of Money and Economic Equivalence

   Preparation: Lecture Notes

4. WEEK 4

   Engineering Economy Factors

   Preparation: Lecture Notes

5. WEEK 5

   Nominal and Effective Rates

   Preparation: Lecture Notes

6. WEEK 6

   Project Evaluation Methods

   Preparation: Lecture Notes

7. WEEK 7

   Determination of Rate of Return

   Preparation: Lecture Notes

8. WEEK 8

   Resolution of Multiple Rates of Return

   Preparation: Lecture Notes

9. WEEK 9

   Decision Rules in Rate of Return Analysis

   Preparation: Lecture Notes

10. WEEK 10

    Benefit Cost Analysis

    Preparation: Lecture Notes

11. WEEK 11

    Capital Budgeting

    Preparation: Lecture Notes

12. WEEK 12

    Inflation and Index Numbers

    Preparation: Lecture Notes

13. WEEK 13

    Replacement Analysis

    Preparation: Lecture Notes

14. WEEK 14

    After Tax Economic Analysis

    Preparation: Lecture Notes

ASSESSMENT

• Rate of Midterm Exam to Success30%
• Rate of Final Exam to Success70%

WORKLOAD

READING

• Engineering Economy, Leland Blank and Anthony Tarquin, McGraw Hill
• Lecture notes

TEACHING STAFF

• Assist.Prof. Engin SANSARCICOORDINATOR
• Assist.Prof. Engin SANSARCI