Economy For Engineers

1. NAME: - SUBHAJIT NANDI
UNIVERSITY ROLL NO. :- 10900121089
SUBJECT CODE:- HSMC-301
TOPIC: - ROLE OF ENGINEERING ECONOMICS

2. WHAT IS AN ENGINEERING ECONOMY?
The engineering economy is a subset of the economy for
application to engineering projects.
ECONO
MY
NATURE
ECONOMICS HAS A WIDE ROLE IN THE
ENGINEERING DOMAIN.
Engineers seek solutions to problems, and the economic
viability of each potential alternative or design is normally
considered along with the technical aspects.
Engineering economy involves the evaluation of the costs
and benefits of proposed projects.
COS
T
BENEFIT

3. Engineers play a major role in investment by making decisions
based on economic analysis and design considerations.
Ask Imagin
e
Plan
Creat
e
Improve
Thus, decisions often reflect the engineer’s choice of
how to best invest funds by choosing the proper
alternative out of a set of alternatives.
OR
Plan
A
Plan B
ROLE OF ENGINEERING ECONOMY IN DECISION MAKING
The economic evaluation of alternatives is based on the so-called “Measure
of Worth” such as:
• Present worth: the amount of money at the current time.
• Future worth: the amount of money at some future time.

4. • Payback period: Number of years to recover the initial investment
and a stated rate of return.
• Rate of return: The compound interest rate on unpaid or
unrecovered balances.
• Benefit/cost ratio.
Decisions affect what will happen in the future; thus the time frame of the engineering
economy is the future.
So, engineering economy analysis presents the best estimates of what is expected to occur.
1) Understand the Problem.
2) Collect all relevant data/information.
3) Define the feasible alternatives.
4) Evaluate each alternative.
5) Select the “best” alternative.
6) Implement and monitor.
Data Extraction
Payment
Price
Statistics
Date
Name

5. Economics is no different. Supply, demand, elasticity, comparative
advantage, consumer surplus, deadweight loss -- these terms are part of
the economist’s language.
SUPPLY DEMAND
CONCLUSION: -
The marriage between economics and engineering is
one that is crucial to the success of engineers in the
21st century; the interdisciplinary nature of the topic
offers key insight into the underlying mechanisms that
drive daily business operations.
Engineering economics is an integral component of many engineering curricula across
the country, covering a wide variety of topics including the time value of money, cost
analysis, interest rates, economic fluctuations, depreciation, and everything in-
between.
Cost
Quantity
Economic
Order
Quantity
Holding Cost
Ordering Cost