Engineering Economics is a subject of vital importance to Engineers. This subject helps one understand the need for the knowledge of Economics for being an effective manager and decision maker.
The Economics theories are used to take decisions related to uncertain and changing business environment. Economics theories deal with the principles of demand, pricing, cost, production, competition, trade cycles, and national income and so on.
Engineering Economics refers to those aspects of economics and its tools of analysis most relevant to the Engineers decision making process.
The seven-step procedures used to assist the decision making are:
1. The recognition, definition and evaluation of the problem.
2. Search for potential as well as feasible alternatives.
3. Incorporating the basic cash flow approach.
4. Decision should serve the long term interest of the organisation.
5. Analysing the economic aspects of the engineering problem.
6. The preferred alternative is based on the total effort.
7. Attention to ensure feedback for improvement of operation.
Topics Covered in this App are Listed Below
Engineering Economics: Meaning and Characteristics
Engineering Economics Overview
Sinking fund factor
Capital recovery factor
Series present worth factor
Other Interest Calculation Concepts
Comparison of Alternatives
Inflation and the discount rate
Rate of Return
Identification of Relevant Benefits and Costs
Measurement of Benefits and Costs
Selection of Best Alternative
Treatment of Uncertainty