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Engineering economy and the design process

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Each idea (or opportunity) is then identified in turn and recorded on a flip chart or board by the NGT facilitator, leaving ample space between ideas for comments or clarification.
This process continues until all the opportunities have been recorded, clarified, and displayed for all to see.
At this point, a voting procedure is used to prioritize the ideas or opportunities.
Finally, voting results lead to the development of group consensus on the topic being addressed

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Engineering economy and the design process

  1. 1. Engineering Economy and the Design Process
  2. 2.  A sound engineering economic analysis procedure incorporates the basic principles discussed In the previous lectures and involves several steps.  The seven-step procedure is also used to assist decision making within the engineering design process.  The general relationship between the activities in the design process and the steps of the economic analysis procedure is indicated in the Table .
  3. 3. Problem Definition • The first step of the engineering economic analysis procedure (problem definition )is particularly important, since it provides the basis for the rest of the analysis. • A problem must be well understood and stated in an explicit form before the project team proceeds with the rest of the analysis.  Recognition of the problem is normally stimulated by internal or external organizational needs or requirements.  An operating problem within a company (internal need) or a customer expectation about a product or service (external requirement) are examples.
  4. 4. Development of Alternatives • The two primary actions in Step 2 of the procedure are : • (1) searching for potential alternatives (2) screening them to select a smaller group of feasible alternatives for detailed analysis.
  5. 5. Searching for Superior Alternatives • creativity and resourcefulness were emphasized as being absolutely essential to the development of potential alternatives. • The difference between good alternatives and great alternatives depends largely on an individual’s or group’s problem-solving efficiency.
  6. 6. Developing Investment Alternatives • “It takes money to make money,” as the old saying goes. • to make money, each firm must invest capital to support its important human resources— butin what else should an individual firm invest? • There are usually hundreds of opportunities for a company to make money.
  7. 7. • Engineers are at the very heart of creating value for a firm by turning innovative and creative ideas into new or re engineered commercial products and services. • Most of these ideas require investment of money, and only a few of all feasible ideas can be developed, due to lack of time, knowledge, or resources.
  8. 8. Approaches for Investment Alternatives two approaches that have found wide acceptance in industry for developing sound investment alternatives • (1) Classical brainstorming • (2) Nominal Group Technique (NGT).
  9. 9. Classical Brainstorming • Classical brainstorming is the most well-known and often-used technique for idea generation.  There are four rules for successful brainstorming: 1. Focus on quantity 2. Reserve Criticism. 3. Welcome unusual idea. 4. Combine and improve ideas
  10. 10. Brainstorming Session • A classical brainstorming session has the following basic steps: 1. Preparation. The participants are selected, and a preliminary statement of the problem is circulated. 2. Brainstorming. A warm-up session with simple unrelated problems is conducted, the relevant problem and the four rules of brainstorming are presented, and ideas are generated and recorded using checklists and other techniques if necessary. 3. Evaluation. The ideas are evaluated relative to the problem.
  11. 11. Nominal Group Technique(NGT)  The NGT involves a structured group meeting designed to incorporate individual ideas and judgments into a group consensus. • By correctly applying the NGT, it is possible for groups of people (preferably, 5 to 10) to generate investment alternatives or other ideas for improving the competitiveness of the firm/Company. • The technique, when properly applied, draws on the creativity of the individual participant.
  12. 12. NGT Format • The basic format of an NGT session is as follows: • 1. Individual silent generation of ideas • 2. Individual round-robin feedback and recording of ideas • 3. Group clarification of each idea • 4. Individual voting and ranking to prioritize ideas • 5. Discussion of group consensus results
  13. 13. The NGT session begins with an explanation of the procedure and a statement of question(s), preferably written by the facilitator. • The group members are then asked to prepare individual listings of alternatives, such as investment ideas or issues that they feel are crucial for the survival and health of the organization. This is known as the silent- generation phase. • After this phase has been completed, the facilitator calls on each participant, in round- robin fashion, to present one idea from his or her list.
  14. 14. • Each idea (or opportunity) is then identified in turn and recorded on a flip chart or board by the NGT facilitator, leaving ample space between ideas for comments or clarification. • This process continues until all the opportunities have been recorded, clarified, and displayed for all to see. • At this point, a voting procedure is used to prioritize the ideas or opportunities. • Finally, voting results lead to the development of group consensus on the topic being addressed.

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