Comparing alternatives in Engineering Economics and Management
In the real world, the majority of engineering economic analysis problems are
alternative comparisons. In these problems, two or more mutually exclusive
investments compete for limited funds. A variety of methods exists for selecting
the superior alternative from a group of proposals. Each method has its own merits
and applications
PRINCIPLES OF ENGINEERING ECONOMY
1. Develop the Alternatives;
2. Focus on the Differences;
3. Use a Consistent Viewpoint;
4. Use a Common Unit of Measure;
5. Consider All Relevant Criteria;
6. Make Uncertainty Explicit;
7. Revisit Your Decisions
DEVELOP THE ALTERNATIVES
The final choice (decision) is among alternatives. The alternatives need to be identified and then defined for subsequent analysis.
FOCUS ON THE DIFFERENCES
Only the differences in expected future outcomes among the alternatives are relevant to their comparison and should be considered in the decision.
USE A CONSISTENT VIEWPOINT
The prospective outcomes of the alternatives, economic and other, should be consistently developed from a defined viewpoint (perspective).
USE A COMMON UNIT OF MEASURE
Using a common unit of measurement to enumerate as many of the prospective outcomes as possible will make easier the analysis and comparison of alternatives.
CONSIDER ALL RELEVANT CRITERIA
Selection of a preferred alternative (decision making) requires the use of a criterion (or several criteria). The decision process should consider the outcomes enumerated in the monetary unit and those expressed in some other unit of measurement or made explicit in a descriptive manner.
MAKE UNCERTAINTY EXPLICIT
Uncertainty is inherent in projecting (or estimating) the future outcomes of the alternatives and should be recognized in their analysis and comparison.
REVISIT YOUR DECISIONS
Improved decision making results from an adaptive process; to the extent practicable, the initial projected outcomes of the selected alternative should be subsequently compared with actual results achieved.
PRINCIPLES OF ENGINEERING ECONOMY
1. Develop the Alternatives;
2. Focus on the Differences;
3. Use a Consistent Viewpoint;
4. Use a Common Unit of Measure;
5. Consider All Relevant Criteria;
6. Make Uncertainty Explicit;
7. Revisit Your Decisions
DEVELOP THE ALTERNATIVES
The final choice (decision) is among alternatives. The alternatives need to be identified and then defined for subsequent analysis.
FOCUS ON THE DIFFERENCES
Only the differences in expected future outcomes among the alternatives are relevant to their comparison and should be considered in the decision.
USE A CONSISTENT VIEWPOINT
The prospective outcomes of the alternatives, economic and other, should be consistently developed from a defined viewpoint (perspective).
USE A COMMON UNIT OF MEASURE
Using a common unit of measurement to enumerate as many of the prospective outcomes as possible will make easier the analysis and comparison of alternatives.
CONSIDER ALL RELEVANT CRITERIA
Selection of a preferred alternative (decision making) requires the use of a criterion (or several criteria). The decision process should consider the outcomes enumerated in the monetary unit and those expressed in some other unit of measurement or made explicit in a descriptive manner.
MAKE UNCERTAINTY EXPLICIT
Uncertainty is inherent in projecting (or estimating) the future outcomes of the alternatives and should be recognized in their analysis and comparison.
REVISIT YOUR DECISIONS
Improved decision making results from an adaptive process; to the extent practicable, the initial projected outcomes of the selected alternative should be subsequently compared with actual results achieved.
Principles of engineering economics, concept on Micro and macro analysis, problem solving and decision making
concept of simple and compound interest,interest formula for: single payment, equal payment and uniform gradient series.Nominal and effective interest rates, deferred annuities, capitalized cost.Present worth, annual equivalent , capitalized and rate of return methods , Minimum Cost analysis and break even analysis
This is first or introductory lecture of Mechanics of Solids-1 as per curriculum formulated by Higher Education Commission and Pakistan Engineering Council
Introduction to Engineering Economy is about engineering economy &The technological and social environments in which we live continue to change at a rapid rate.
In recent decades, advances in science and engineering have transformed our transportation systems, revolutionized the practice of medicine, and miniaturized electronic circuits so that a computer can be placed on a semiconductor chip.
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
This report discusses and talks about the engineering economic analysis material and
introduces the student to cost analysis scenarios in which a typical working engineer
might be involved. It outlines some of the many and varied cost and economic
analyses to which beginning, as well as journeyman, engineers are exposed. Effective
analysis of product and project costs and the ability to implement cost control
measures are two sides of the same coin. Most business economic decisions involve
the element of time, however, and it is thus necessary to consider factors such as
interest, the time value of money, and depreciation of equipment. The effect of
inflation (or deflation) on the rate of return for investment depends on how the
future returns respond. Larger investments are analyzed by evaluating the rate of
return. Like other decision-making processes, the decision matrix is a valuable tool to
assist in evaluating the various alternatives, And so report explained and I mentioned
a very important part or let's say element in engineering economic witch is interested I
explained it briefly within its formula and figures and its type and ect...finally my aim
is showing effect and importance and actions of the (Interest) in economy field.
Principles of engineering economics, concept on Micro and macro analysis, problem solving and decision making
concept of simple and compound interest,interest formula for: single payment, equal payment and uniform gradient series.Nominal and effective interest rates, deferred annuities, capitalized cost.Present worth, annual equivalent , capitalized and rate of return methods , Minimum Cost analysis and break even analysis
This is first or introductory lecture of Mechanics of Solids-1 as per curriculum formulated by Higher Education Commission and Pakistan Engineering Council
Introduction to Engineering Economy is about engineering economy &The technological and social environments in which we live continue to change at a rapid rate.
In recent decades, advances in science and engineering have transformed our transportation systems, revolutionized the practice of medicine, and miniaturized electronic circuits so that a computer can be placed on a semiconductor chip.
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
This report discusses and talks about the engineering economic analysis material and
introduces the student to cost analysis scenarios in which a typical working engineer
might be involved. It outlines some of the many and varied cost and economic
analyses to which beginning, as well as journeyman, engineers are exposed. Effective
analysis of product and project costs and the ability to implement cost control
measures are two sides of the same coin. Most business economic decisions involve
the element of time, however, and it is thus necessary to consider factors such as
interest, the time value of money, and depreciation of equipment. The effect of
inflation (or deflation) on the rate of return for investment depends on how the
future returns respond. Larger investments are analyzed by evaluating the rate of
return. Like other decision-making processes, the decision matrix is a valuable tool to
assist in evaluating the various alternatives, And so report explained and I mentioned
a very important part or let's say element in engineering economic witch is interested I
explained it briefly within its formula and figures and its type and ect...finally my aim
is showing effect and importance and actions of the (Interest) in economy field.
The International Journal of Engineering & Science is aimed at providing a platform for researchers, engineers, scientists, or educators to publish their original research results, to exchange new ideas, to disseminate information in innovative designs, engineering experiences and technological skills. It is also the Journal's objective to promote engineering and technology education. All papers submitted to the Journal will be blind peer-reviewed. Only original articles will be published.
The papers for publication in The International Journal of Engineering& Science are selected through rigorous peer reviews to ensure originality, timeliness, relevance, and readability.
Renewable Energy Cooperatives (RECs) are proven
to be significant building blocks in the energy
transition away from fossil fuels towards renewable
energy. The process of forming these RECs is
professionalising, but scientific literature on Action
plans to follow is limited. This paper sets out to
research if there is value for design in tackling the
formation of RECs and if so, which design methods
should be used. Through a three case study
approach which compare the formation process of
these three Dutch RECs it is found that all three
follow the same process as laid out in the Action
plan. Since this action plan encompasses design
methods, it can be argued that indeed there is a
place for design in facilitating the formation of
RECs.
I am uploading all these notes only for the sake of Allah SWT. A very comprehensive and detailed Lecture Slide for Management Students (Related to Engineering)
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Think about what you now know about project delivery systems. Are th.pdfdonohovalentinj6
Think about what you now know about project delivery systems. Are there any specific
enhancements that could be made to the currently used project delivery systems to help them to
better address the needs of stakeholders? As you prepare for this Discussion, consider how
stakeholder needs may change in the future. With these thoughts in mind, respond to the
following questions:
In your opinion, how will current project delivery systems evolve to accommodate the changing
needs of society?
How may the increased use of technology shape future project delivery systems?
Solution
The design and construction industry continues to debate which project delivery system is best.
Just pick up a trade magazine and you will often find an article addressing the selection of
project delivery systems for a design and construction project. It is also common for project
delivery systems to be a seminar topic.
So what is the “best delivery system” for a design and construction project? The answer is IT
DEPENDS! There is NO silver bullet! There is NO best system! The “best delivery system”
debate is wrong and misses a great opportunity for the design and construction industry.
Selection of the project delivery system should be based on specific project requirements,
specific characteristics and circumstances of the owner, and the successful formulation of the
project team. The real opportunity for design professionals and the construction industry is to
help educate owners regarding the available project delivery systems, and then assist owners in
selecting the best delivery system for the specific project and circumstance. Selection should
always benefit the owner while at the same time promote a winning opportunity for all project
participants.
This paper is intended to present concepts and tools to help owners, design professionals, and
the construction industry to select and set-up a “winning delivery system” for projects. This
paper is divided into three areas and each of these areas is divided into three parts:
•Three Primary Project Delivery Systems—All project delivery systems can be derived from
three primary systems.
•Three Key Project Delivery System Principles—These include the seven major roles required
for all design and construction projects, the two types of agreements owners have with design
and construction providers, and the allocation of risk for winning projects.
•Three Key Areas of Consideration for Project Delivery System Selection—Selection should
include project, owner, and team building considerations.
Three Primary Project Delivery Systems
There are several good publications available that address project delivery systems. Four that are
particularly helpful include:
•Client Advisor by The Associated General Contractors of Massachusetts (AGC) and The
Boston Society of Architects (BSA).
•Handbook on Project Delivery by The American Institute of Architects, California Council
(AIACC).
•Project Delivery Systems for Building Construction by A.
Engineering Project Management
This report is going to talk about and explain the basics of project
management, the importance of project management, the role of project
manager, the skills a good project manager must have, some key concepts
that almost every project must follow, the steps of the project and how the
project works and what effects it, and some of the reasons that may cause
problems in the process of the way that the project is going or some of the
problems that may actually make the project fail and not just create some
problems that can be solved, and the report also explains a small example
to make understanding the concept of engineering project management
easy.
The report explains the entire process of project management from the first
step before the project starts, and it explains on how to achieve the goal of
the project at the end when the project is finished.
The Effect of Declination on The Tide Pattern in Hydroghraphic SurveyingNzar Braim
The Effect of Declination on The Tide Pattern in Hydroghraphic Surveying.
I was discussed about the tide and what's meaning of tide
and I explained it with simple figure
Contribution Of Real Time Network (NRTK) for improvement of accuracyNzar Braim
Contribution Of Real Time Network (NRTK) for improvement of accuracy in GPS.
RTK GPS has seen incredible mechanical advances in the course of recent years and is currently routinely utilized in a wide assortment of building type applications. RTK GPS gives a centimeter-level situation in a moment or two, permitting laborers to get the exactness. One GPS
collector is put in a control point (named the reference station) with known directions. RTK framework consolidates GPS data and information radio correspondence with cutting edge calculations to figure the exact situation of the tasks, for example, parkway and extension, GIS venture.
Types of Walls (Brick,Concrete Block & Stone Walls)Nzar Braim
Types of Walls (Brick, Concrete
Block & Stone Walls)
The main objective of this project is to assess the contribution of nonstructural masonry walls to the safety of buildings after an unforeseeable
event and the definition of procedures to enhance this contribution
Differentiation between primary and secondary LIDAR system of Remote SensingNzar Braim
In this report I will explain the importance of remote sensing in general and explaining
one of the most important system or application which is LIDAR (light detection and
ranging) and I will explain all its types and uses and applications and the components
and advantage of this system and how it works then I will mention the imaging system
with explaining the primary and secondary return imaging in LiDAR
The concept of total Horizontal and Vertical UncertaintyNzar Braim
My aim in this report is showing The Importance and significance the subject
of hydrographic which is important science in our life especially for some
countries that's covered with the water or let's say the large amount of water
so we knew that survey engineer deals with the coordinates measurement,
errors ,accuracies , other sectors so hydrographic surveyor should observing
carefully because it deals with the water as we know water let's say level of
the water is not suitable changes from place to another due to the gravity of
the Earth and all above mentioned it should be considered for the the
movement of the ships the other water vehicles in the water
Thermostone in Constrication or ThermostoneNzar Braim
My aim in this report is showing the specialty of thermostone and about the
type of creation the chemical sectional and preparation then discuss about
the method and advantage of thermostone.s to improve the report we used
the Koya thermostone the rate of construction in the Kurdistan region (KRG)
has increased through the recent decade due to a wide scope of investments
in different projects and especially for residential projects, infrastructure and
others
Developing project objectives and Execution plan in Economy management Nzar Braim
my aim in creating this report is to discuss about developing project objectives and
execution plan ,In every project and work that is done we have to consider a set of
things because each project must have its own goals and objectives.
It has to have its own time and the project has to be successful in all areas And to
further support the report we put an example on the schedule talks about 150m street
in Erbil.
At first we discuss about execution, next discuss about elements, then discuss
developing project objectives, after that the factors that make the project a success.
Erbil Citadel is a fortified settlement on top of an imposing ovoid-shaped tell (a hill created by many generations of people living and rebuilding on the same spot) in the Kurdistan region, Erbil Governorate. A continuous wall of tall 19th-century façades still conveys the visual impression of an impregnable fortress, dominating the city of Erbil. The citadel features a peculiar fan-like pattern dating back to Erbil's late Ottoman phase.
Law of supply and demand in Economy and management.
In economics, the relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy. It is the main model of price determination used in economic theory. The price of a commodity is determined by the interaction of supply and demand in a market. The resulting price is referred to as the equilibrium price and represents an agreement between producers and consumers of the good. In equilibrium, the quantity of a good supplied by producers equals the quantity demanded by consumers.
Role of electromagnetic Radiation in Remote SensingNzar Braim
Role of electromagnetic Radiation in Remote Sensing
It should be clear by now that the electromagnetic waves are originator and
carrier of information in Earth observation. The information content of the products delivered by a given type of sensor is essentially related to the parameters, mainly frequency (or wavelength) and polarization, characterizing the observing system, including the geometry at which data are acquired. Therefore, the specifications of an EO system, which include the type of sensor, the band of operation, the observation angle, etc.
The Hyperbolic Radio System in hydrographic surveying
Hyperbolic navigation systems are systems designed to provide long-distance positioning information. LORAN C system is operating and provides position information for ships and land vehicles, too. Today, there are some modernization programs called Euro fix, eLoran, which aim to increase the positioning accuracy, high reliability, and independence from satellite navigation systems. The theoretical accuracy of these modern systems is compatible with navigation satellite systems' accuracy.
Car Parking Design in Urban Planning
The growing population of India has created many problems one of the
challenging ones being car parking which we confront almost every day.
Besides the problem of space for cars moving on the road, greater is the
the problem of space for a parked vehicle considering that private vehicles
remain parked for most of their time. While residential projects still escape
with designated parking, the real problem lies with commercial spaces many
a time which is overcome by taking extra open spaces to park.
Portland Cement
Portland cement is extensively used in the construction of nuclear waste facilities and as a matrix for shielding and immobilization of radioactive species. It affords both a physical and chemical potential for immobilization. These potentials are quantified and related to specification, fabrication, and performance. However, performance in the long term depends on the cement formulation as well as the geochemistry of the disposal environment and interactions between cement and its near field environment including inactive waste components and other containment materials. Future performance can be estimated using data from natural analogs,
the experience of the performance of historic structures, and by modeling. A comparison of Portland cement with other non-Portland cement is also made.
Segregation in Concrete
The main explanation of this report of Segregation in concrete in terms of
concrete and self-compacting. The aim was to find an analytical relation to
estimating the risk of sedimentation, using the characteristics of the particles
and those of the mortars. The prediction of surface effect segregation (i.e.
transportation of different particle size fractions during heap formation) has
been the subject of a significant level of study.
Explanation of the type of segregation in term size, dry, wet, and water separate
and effect segregation in concrete in term strength and cracks, and
Prevention of Segregation in Concrete.
I brought up an example that supports segregation in concrete which is used
in Kurdistan Region, and explaining the example in term caused segregation
the effect in concrete.
Bar Graph Method in Engineering management Nzar Braim
Bar Graph Method in Engineering management
The main explanation of this report of the Bar Graph Method in terms of
schedule and constriction planning.
The time allowed for Bar graph Schedule performance is usually an
an important consideration for both the project owner and the project contractor.
I've explained the good side of the Bar Graph Method in terms of ( Clarity,
Communication, Motivation, Coordination, Creativity, Time Management
Flexibility, Manageability, Efficiency, Accountability ) and I've talked
about the downside.
I brought up an example that supports the Bar Graph Method which is used in
Kurdistan Region, name of example is (Quantity Estimation and Bar
Graph Schedule for the Project of 150 m Road- Erbil City).
Reconnaissance for Hydrographic Surveying ProjectNzar Braim
Reconnaissance for Hydrographic
Surveying Project
This report talks about how the reconnaissance will be and it is effectively important the place that we survey and observation so the surveyor should prepare himself or herself for the project visiting site and site survey and planning and so on.
Observer visiting the site many times daily to see what is the situation and the condition and booking his or her notes recording them such as is the site ready to start the observation? Or is the site has safety to start? I mean replace safety conditions and also must have collected all this information and choose which instrument this site or this project and many other conditions should be considered after all above that I have mentioned he or she decides to start and beginning Project and surveying or not. This is the idea or this the outline recognizes.
Reconnaissance for Hydrographic Survey ProjectNzar Braim
Reconnaissance for Hydrographic Survey Project
The system is able to withstand the harsh environment of the nearshore and acquire beach profile information across the surf zone. This paper describes the system and results of a comparison in Myrtle Beach, S.C., between surveys collected over a 3- day period by the personal watercraft system and by a similar system mounted aboard a traditional coastal survey vessel.
The bathymetric measurements for the personal watercraft-mounted echosounder surveying system display mean repetitive differences of 6 cm.
This workshop is an introductory course in Hydrographic surveying.
It is designed for surveyors, engineers, survey technicians, dredge operators, and hydrographers.
The course focuses on theoretical principles of hydrographic surveying, project description, operation, and map production.
Embracing GenAI - A Strategic ImperativePeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
Biological screening of herbal drugs: Introduction and Need for
Phyto-Pharmacological Screening, New Strategies for evaluating
Natural Products, In vitro evaluation techniques for Antioxidants, Antimicrobial and Anticancer drugs. In vivo evaluation techniques
for Anti-inflammatory, Antiulcer, Anticancer, Wound healing, Antidiabetic, Hepatoprotective, Cardio protective, Diuretics and
Antifertility, Toxicity studies as per OECD guidelines
Palestine last event orientationfvgnh .pptxRaedMohamed3
An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
• The Committee on Ways and Means has been investigating several universities since November 15, 2023, when the Committee held a hearing entitled From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing. The Committee followed the hearing with letters to those institutions on January 10, 202
Acetabularia Information For Class 9 .docxvaibhavrinwa19
Acetabularia acetabulum is a single-celled green alga that in its vegetative state is morphologically differentiated into a basal rhizoid and an axially elongated stalk, which bears whorls of branching hairs. The single diploid nucleus resides in the rhizoid.
Francesca Gottschalk - How can education support child empowerment.pptxEduSkills OECD
Francesca Gottschalk from the OECD’s Centre for Educational Research and Innovation presents at the Ask an Expert Webinar: How can education support child empowerment?
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
Comparing alternatives in Engineering Economics and Management
1. 1
Comparing alternatives
Student Name:
Class: 4
Course Title: Engineering Economics and Management
Department: Geomatics (Surveying)
College of Engineering
Salahaddin University-Erbil
Academic Year 2019-2020
Copyright
2. 2
ABSTRACT
In the real world, the majority of engineering economic analysis problems are
alternative comparisons. In these problems, two or more mutually exclusive
investments compete for limited funds. A variety of methods exists for selecting
the superior alternative from a group of proposals. Each method has its own merits
and applications.
There are three classes of relations among projects: (1) independent, (2) mutually
exclusive, and (3) related but not mutually exclusive. We then showed how the
third class of projects, those that are related but not mutually exclusive, could be
combined into sets of mutually exclusive projects. This enabled us to limit the
discussion to the first two classes—independent and mutually exclusive.
Independent projects are considered one at a time and are either accepted or
rejected. Only the best of a set of mutually exclusive projects is chosen. The
present worth method compares projects on the basis of converting all cash flows
for the project to a present worth. An independent project is acceptable if its
present worth is greater than zero. The mutually exclusive project with the highest
present worth should be taken. Projects with unequal lives must be compared by
assuming that the projects are repeated or by specifying a study period. Annual
worth is similar to present worth, except that the cash flows are converted to a
uniform series. The annual worth method may be more meaningful and does not
require more complicated calculations when the projects have different service
lives.
In this report we will go into detail about the ways of comparing alternatives in
engineering economics. We will explain the types of ways, and to help further
understand we will show a solved example.
3. 3
TABLE OF CONTENTS
Abstract 2
Table of contents 3
Chapter one – Introduction 4
Chapter two – background & review 6
Chapter three – methods
3.1 Minimum acceptable rate of return (MARR) 8
3.2 Present worth (PW) & Annual worth (AW) comparisons 8
Chapter four – theory & design
4.1 present worth analysis 11
4.2 annual cost analysis 11
4.3 rate of return analysis 11
4.4 benefit-cost analysis 13
4.5 break-even analysis 13
4.6 example 14
Chapter five – conclusion 15
References 16
4. 4
CHAPTER ONE – INTRODUCTION
Economics is the study of how people and society choose to utilize scarce
resources that could have alternative uses in order to produce various commodities
and to distribute them for consumption, now or in the future. Economics is the
science which studies human behavior which aims at meeting maximum objectives
of an individual with the help of scarce means.
Why should an engineer care about economics?
- Economics is the fundamental theory of business.
- Business decisions based on economic principles determine the success
or failure of engineering projects.
Engineering economy
Engineers must decide if the benefits of a project exceed its costs, and must make
this comparison in a unified framework. The framework within which to make this
comparison is the field of engineering economics, which strives to answer exactly
these questions, and perhaps more. Engineering economics:
• deals with the concepts and techniques of analysis useful in evaluating the worth
of systems, products, and services in relation to their costs.
• is used to answer many different questions
• Which engineering projects are worthwhile?
• Which engineering projects should have a higher priority?
• How should the engineering project be designed?
The essential idea of investing is to give up something valuable now for the
expectation of receiving something of greater value later. An investment may be
thought of as an exchange of resources now for an expected flow of benefits in the
future. Business firms, other organizations, and individuals all have opportunities
to make such exchanges. A company may be able to use funds to install equipment
that will reduce labor costs in the future.
5. 5
These funds might otherwise have been used on another project or returned to the
shareholders or owners. An individual may be able to study to become an engineer.
Studying requires that time be given up that could have been used to earn money or
to travel. The benefit of study, though, is the expectation of a good income from an
interesting job in the future.
Not all investment opportunities should be taken. The company considering a
laborsaving investment may find that the value of the savings is less than the cost
of installing the equipment. Not all investment opportunities can be taken. The
person spending the next four years studying engineering cannot also spend that
time getting degrees in law and science. Engineers play a major role in making
decisions about investment opportunities. In many cases, they are the ones who
estimate the expected costs of and returns from an investment. They then must
decide whether the expected returns outweigh the costs to see if the opportunity is
potentially acceptable. They may also have to examine competing investment
opportunities to see which is best. Engineers frequently refer to investment
opportunities as projects. Throughout most of this text, the term project will be
used to mean investment opportunity.
A basic part of engineering is choosing between alternative designs. Economic
comparisons are tremendously important in our society, and are usually used to
select between alternatives. We will discuss the tools available for making
economic comparisons between alternatives.
Economic comparisons can be made if costs and revenues are reduced to a
common basis, such as present worth, annual worth, or future worth. All three
methods select the same alternative if the underlying assumptions are satisfied.
Comparisons are sensitive to the interest rate, which is based on the M.A.R.R.
Comparisons are also sensitive to the inflation rate.
6. 6
CHAPTER TWO – BACKGROUND & REVIEW
Companies and individuals are often faced with a large number of investment
opportunities at the same time. Relations among these opportunities can range
from the simple to the complex. We can distinguish three types of connections
among projects that cover all the possibilities.
Projects may be
1. Independent
2. Mutually exclusive
3. Related but not mutually exclusive
The simplest relation between projects occurs when they are independent. Two
projects are independent if the expected costs and the expected benefits of each
project do not depend on whether the other one is chosen. A student considering
the purchase of a vacuum cleaner and the purchase of a personal computer would
probably find that the expected costs and benefits of the computer did not depend
on whether he or she bought the vacuum cleaner. Similarly, the benefits and costs
of the vacuum cleaner would be the same whether or not the computer was
purchased. If there are more than two projects under consideration, they are said to
be independent if all possible pairs of projects in the set are independent. When
two or more projects are independent, evaluation is simple. Consider each
opportunity one at a time, and accept or reject it on its own merits.
Projects are mutually exclusive if, in the process of choosing one, all other
alternatives are excluded. In other words, two projects are mutually exclusive if it
is impossible to do both or it clearly would not make sense to do both.
The third class of projects consists of those that are related but not mutually
exclusive. For pairs of projects in this category, the expected costs and benefits of
one project depend on whether the other one is chosen.
For example, Klamath Petroleum may be considering a service station at Fourth
Avenue and Main Street as well as one at Twelfth and Main. The costs and
benefits from either station will clearly depend on whether the other is built, but it
may be possible, and may make sense, to have both stations. Evaluation of related
but not mutually exclusive projects can be simplified by combining them into
7. 7
exhaustive, mutually exclusive sets. For example, the two projects being
considered by Klamath can be put into four mutually exclusive sets:
1. Neither station—the “do nothing” option
2. Just the station at Fourth and Main
3. Just the station at Twelfth and Main
4. Both stations
In general, n related projects can be put into 2n sets, including the “do nothing”
option. Once the related projects are put into mutually exclusive sets, the analyst
treats these sets as the alternatives. We can make 2n mutually exclusive sets with n
related projects by noting that for any single set, there are exactly two possibilities
for each project. The project may be in or out of that set. To get the total number of
sets, we multiply the n twos to get 2n. In the Klamath example, there were two
possibilities for the station at Fourth and Main—accept or reject. These are
combined with the two possibilities for the station at Twelfth and Main to give the
four sets that we listed. A special case of related projects is where one project is
contingent on another. Consider the case where project A could be done alone or A
and B could be done together, but B could not be done by itself. Project B is then
contingent on project A because it cannot be taken unless A is taken first. For
example, the Athens and Manchester Development Company is considering
building a shopping mall on the outskirts of town. It is also considering building a
parking garage to avoid long outdoor walks by patrons. Clearly, it would not build
the parking garage unless it were also building the mall. Another special case of
related projects is due to resource constraints. Usually the constraints are financial.
Fig. 1
8. 8
CHAPTER THREE - METHODS
3.1 Minimum acceptable rate of return (MARR)
A company evaluating projects will set for itself a lower limit for investment
acceptability known as the minimum acceptable rate of return (MARR). The
MARR is an interest rate that must be earned for any project to be accepted.
Projects that earn at least the MARR are desirable, since this means that the money
is earning at least as much as can be
earned elsewhere. Projects that earn less than the MARR are not desirable, since
investing money in these projects denies the opportunity to use the money more
profitably elsewhere. The MARR can also be viewed as the rate of return required
to get investors to invest in a business. If a company accepts projects that earn less
than the MARR, investors will not be willing to put money into the company. This
minimum return required to induce investors to invest in the company is the
company’s cost of capital.
The MARR is thus an opportunity cost in two senses. First, investors have
investment opportunities outside any given company. Investing in a given
company implies forgoing the opportunity of investing elsewhere. Second, once a
company sets a MARR, investing in a given project implies giving up the
opportunity of using company funds to invest in other projects that pay at least the
MARR.
3.2 Present worth (PW) & Annual worth (AW) comparisons
The present worth (PW) comparison method and the annual worth (AW)
comparison method are based on finding a comparable basis to evaluate projects in
monetary units. With the present worth method, the analyst compares project A
and project B by computing the present worths of the two projects at the MARR.
The preferred project is the one with the greater present worth. The value of any
company can be considered to be the present worth of all of its projects. Therefore,
choosing projects with the greatest present worth maximizes the value of the
company. With the annual worth method, the analyst compares projects A and B
by transforming all disbursements and receipts of the two projects to a uniform
9. 9
series at the MARR. The preferred project is the one with the greater annual worth.
One can also speak of present cost and annual cost.
Present worth comparisons for independent projects
The alternative to investing money in an independent project is to “do nothing.”
Doing nothing doesn’t mean that the money is not used productively. In fact, it
would be used for some other project, earning interest at a rate at least equal to the
MARR.
Present worth comparisons for mutually exclusive projects
It is very easy to use the present worth method to choose the best project among a
set of mutually exclusive projects when the service lives are the same. One just
computes the present worth of each project using the MARR. The project with the
greatest present worth is the preferred project because it is the one with the greatest
profit.
Annual worth comparisons
Annual worth comparisons are essentially the same as present worth comparisons,
except that all disbursements and receipts are transformed to a uniform series at the
MARR, rather than to the present worth. Any present worth P can be converted to
an annuity A by the capital recovery factor (A/P,i,N). Therefore, a comparison of
two projects that have the same life by the present worth and annual worth
methods will always indicate the same preferred alternative. Note that, although
the method is called annual worth, the uniform series is not necessarily on a yearly
basis. Present worth comparisons make sense because they compare the worth
today of each alternative, but annual worth comparisons can sometimes be more
easily grasped mentally. For example, to say that operating an automobile over five
years has a present cost of $20 000 is less meaningful than saying that it will cost
about $5300 per year for each of the following five years.
10. 10
Comparisons of alternatives with unequal lives
When making present worth comparisons, we must always use the same time
period in order to take into account the full benefits and costs of each alternative. If
the lives of the alternatives are not the same, we can transform them to equal lives
with one of the following two methods:
1. Repeat the service life of each alternative to arrive at a common time period for
all alternatives. Here we assume that each alternative can be repeated with the
same costs and benefits in the future—an assumption known as repeated lives.
Usually we use the least common multiple of the lives of the various alternatives.
Sometimes it is convenient to assume that the lives of the various alternatives are
repeated indefinitely.
Note that the assumption of repeated lives may not be valid where it is reasonable
to expect technological improvements.
2. Adopt a specified study period—a time period that is given for the analysis. To
set an appropriate study period, a company will usually take into account the time
of required service or the length of time it can be relatively certain of its forecasts.
The study period method necessitates an additional assumption about salvage value
whenever the life of one of the alternatives exceeds that of the given study period.
Arriving at a reliable estimate of salvage value may be difficult sometimes.
Because they rest on different assumptions, the repeated lives and the study period
methods can lead to different conclusions when applied to a particular project
choice.
11. 11
CHAPTER FOUR – THEORY/DESIGN
4.1 Present worth analysis
When two or more alternatives are capable of performing the same functions, the
economically superior alternative will have the largest present worth. The present
worth method is restricted to evaluating alternatives that are mutually exclusive
and that have the same lives. This method is suitable for ranking the desirability of
alternatives.
4.2 Annual cost analysis
Alternatives that accomplish the same purpose but that have unequal lives must be
compared by the annual cost method. The annual cost method assumes that each
alternative will be replaced by an identical twin at the end of its useful life (i.e.,
infinite renewal). This method, which may also be used to rank alternatives
according to their desirability, is also called the annual return method or capital
recovery method.
The alternatives must be mutually exclusive and repeatedly renewed up to the
duration of the longest-lived alternative. The calculated annual cost is known as the
equivalent uniform annual cost (EUAC) or equivalent annual cost (EAC). Cost is a
positive number when expenses exceed income.
4.3 Rate of return analysis
An intuitive definition of the rate of return (ROR) is the effective annual interest
rate at which an investment accrues income. That is, the rate of return of an
investment is the interest rate that would yield identical profits if all money was
invested at that rate. Although this definition is correct, it does not provide a
method of determining the rate of return. The present worth of a $100 investment
invested at 5% is zero when i = 5% is used to determine equivalence. Therefore, a
working definition of rate of return would be the effective annual interest rate that
makes the present worth of the investment zero. Alternatively, rate of return could
be defined as the effective annual interest rate that makes the benefits and costs
equal. A company may not know what effective interest rate, i, to use in
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engineering economic analysis. In such a case, the company can establish a
minimum level of economic performance that it would like to realize on all
investments. This criterion is known as the minimum attractive rate of return, or
MARR. Once a rate of return for an investment is known, it can be compared with
the minimum attractive rate of return. If the rate of return is equal to or exceeds the
minimum attractive rate of return, the investment is qualified (i.e., the alternative is
viable). This is the basis for the rate of return method of alternative viability
analysis. If rate of return is used to select among two or more investments, an
incremental analysis must be performed. An incremental analysis begins by
ranking the alternatives in order of increasing initial investment. Then, the cash
flows for the investment with the lower initial cost are subtracted from the cash
flows for the higher-priced alternative on a year-by-year basis. This produces, in
effect, a third alternative representing the costs and benefits of the added
investment. The added expense of the higher-priced investment is not warranted
unless the rate of return of this third alternative exceeds the minimum attractive
rate of return as well. The alternative with the higher initial investment is superior
if the incremental rate of return exceeds the minimum attractive rate of return.
Finding the rate of return can be a long, iterative process, requiring either
interpolation or trial and error. Sometimes, the actual numerical value of rate of
return is not needed; it is sufficient to know whether or not the rate of return
exceeds the minimum attractive rate of return This analysis can be accomplished
without calculating the rate of returns by finding the present worth of the
investment using the minimum attractive rate of return as the effective interest rate
(i.e., i= MARR).
If the present worth is zero or positive, the investment is qualified.
If the present worth is negative, the rate of return is less than the minimum
attractive rate of return and the additional investment is not warranted.
The present worth, annual cost, and rate of return methods of comparing
alternatives yield equivalent results, but they are distinctly different approaches.
The present worth and annual cost methods may use either effective interest rates
or the minimum attractive rate of return to rank alternatives or compare them to the
MARR. If the incremental rate of return of pairs of alternatives are compared with
the MARR, the analysis is considered a rate of return analysis.
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4.4 benefit-cost analysis
The benefit-cost ratio method is often used in municipal project evaluations where
benefits and costs accrue to different segments of the community. With this
method, the present worth of all benefits (irrespective of the beneficiaries) is
divided by the present worth of all costs. (Equivalent uniform annual costs can be
used in place of present worth’s). The project is considered acceptable if the ratio
equals or exceeds 1.0 (i.e., B/ C 2: 1.0). This will be true whenever B- C 2: 0.
When the benefit-cost ratio method is used, disbursements by the initiators or
sponsors are costs. Disbursements by the users of the project are known as
disbenefits. It is often difficult to determine whether a cash flow is a cost or a
disbenefit (whether to place it in the denominator or numerator of the benefit-cost
ratio calculation).
Regardless of where the cash flow is placed, an acceptable project will always
have a benefit-cost ratio greater than or equal to 1.0, although the actual numerical
result will depend on the placement. For this reason, the benefit-cost ratio alone
should not be used to rank competing projects. If ranking is to be done by the
benefit-cost ratio method, an incremental analysis is required, as it is for the rateof-
return method. The incremental analysis is accomplished by calculating the ratio of
differences in benefits to differences in costs for each possible pair of alternatives.
If the ratio exceeds 1.0, alternative 2 is superior to alternative 1. Otherwise,
alternative 1 is superior.
𝐵2 − 𝐵1
𝐶2 − 𝐶1
≥ 1
4.5 Break-even analysis
Break-even analysis is a method of determining when the value of one alternative
becomes equal to the value of one alternative becomes equal to the value of
another. It is commonly used to determine when costs exactly equal revenue. If the
manufactured quantity is less than the break-even quantity, a loss is incurred. If the
manufactured quantity is greater than the breakeven quantity, a profit is made. An
alternative form of the break-even problem is to find the number of units per
period for which two alternatives have the same total costs. Fixed costs are spread
14. 14
over a period longer than one year using the EUAC concept. One of the
alternatives will have a lower cost if production is less than the break-even point.
The other will have a lower cost if production is greater than the break-even point.
The pay-back period, PBP, is defined as the length of time, n, usually in years, for
the cumulative net annual profit to equal the initial investment. It is tempting to
introduce equivalence into pay-back period calculations, but the convention is not
to.
C - (PBP)(net annual profit) = 0
4.6 Example
To help better understand we use an example:
Instead of paying $10,000 in annual rent for office space at the beginning of each
year for the next 10 years, an engineering firm has decided to take out a 10-year,
$100,000 loan for a new building at 6% interest. The firm will invest $10,000 of
the rent saved and earn 18% annual interest on that amount. What will be the
difference between the firm's annual revenue and expenses?
(A) The firm will need $3300 extra.
(B) The firm will need $1800 extra.
(C) The firm will break even.
(D) The firm will have $1600 left over.
The annual loan payment will be
P(A/ P, 6%, 10) = ($100,000)(0.1359) = $13,590
The annual return from the investment will be
P(AI P, 18%, 1) = ($10,000)(1.1800) = $11,800
The difference between the loan payment and the return
on the investment is
$13,590-$11,800 = $1790 ($1800)
15. 15
CHAPTER FIVE – CONCLUSION
Economic comparisons can be made if costs and revenues are reduced to a
common basis, such as present worth, annual worth, or future worth. o All three
methods select the same alternative if the underlying assumptions are satisfied.
Comparisons are sensitive to the interest rate, which is based on the M.A.R.R.
Comparisons are also sensitive to the inflation rate.
Most engineering projects can be accomplished by more than one feasible design
alternative. When the selection of one of these alternatives excludes the choice of
any of others, the alternatives are called mutually exclusive. Typically, the
alternatives being considered require the investment of different amounts of
capital, and their annual revenues and costs may vary. Sometimes the alternatives
may have different useful lives. Because different levels of investment normally
produce varying economic outcomes, we must perform an analysis to determine
which one of the mutually exclusive alternatives is preferred and, consequently,
how much capital should be invested.
In this report we explained the ways of comparing alternatives, and showed a
solved example to better explain.
16. 16
REFERENCES
“Engineering Economics: Financial Decision Making for Engineers” by Elizabeth
M. Jewkes and Niall M. Fraser, fifth edition, 2012
https://www.coursehero.com/file/28815257/Alternativespdf/
https://slideplayer.com/slide/5011480/
https://www.academia.edu/9319979/ENGINEERING_ECONOMICS
https://slideplayer.com/slide/12033639/
https://webpages.uidaho.edu/rnielsen/ce215/Fall2003/EngrEcon%20Examples/Co
mparing%20Alternatives.pdf
https://www.webpages.uidaho.edu/~mlowry/Teaching/EngineeringEconomy/Suppl
emental/FE_Ch._53.pdf