|
KING ABDULAZIZ UNIVERSITY
Department of Industrial Engineering
IE 255: Engineering Economy
Dr. Ammar Y. Alqahtani
Course Description
Emphasizes the systematic evaluation of the costs and benefits associated with proposed technical projects. The student will be exposed to the concepts of the “time value of money” and the methods of discounted cash flow. Students are prepared to make decisions regarding money as capital within a technological or engineering environment.
Course Prerequisites
Math 101; Calculus I.
Textbooks
- Basics of Engineering Economy, Blank, Leland T. and Tarquin, Anthony J. 2nd Ed., 2014, McGraw-Hill, ISBN 9781259080760.
References
1. Contemporary Engineering Economics, 4/E Chan S. Park, 2007, Prentice Hall, ISBN 0131876287.
2. Principles of Engineering Economic Analysis, 4/e, John A. White, Kenneth F. Case, David B. Pratt, and Marvin H. Agee, John Willey and sons, 1998, ISBN 0471110272.
3. Class notes and handouts submitted by the instructors.
Course Goal:
To provide students with the necessary understanding of both technical and managerial issues related to Engineering Economy enabling them to undertake financial analysis of decision making process in an engineering organization.
Course Learning Objectives:
At the end of the course, the students will be able to:
|
1.
|
Apply the fundamentals of engineering economy and the basic principles of the time value of money.
|
|
2.
|
Draw the cash-flow diagrams (CFD).
|
|
3.
|
Identify and compare different interest rates i.e., simple, compound, MARR, ROR, nominal and effective.
|
|
4.
|
Compute equivalent values for time based cash flows of varying complexities.
|
|
5.
|
Compare economic alternatives based on equivalent present worth (PW), future worth (FW), capitalized cost (CC), payback period (PbP), annual worth (AW) values and Benefit cost ratios (B/C).
|
|
6.
|
Compute the internal rate of return (IRR) and evaluate an economic alternative on the basis of IRR.
|
|
7.
|
Make analytical decisions by replacement and breakeven analysis of different projects / alternatives and analysis under uncertain conditions.
|
|
8.
|
Compute the present worth by considering the effects of inflation.
|
|
9.
|
Estimate and allocate cost and apply capital budgeting.
|
|
10.
|
Compute depreciations related to machines or projects using straight line (SL), Declining Balance (DB) and Double Declining Balance (DDB) methods.
|
|
11.
|
Write reports related to engineering economy by using modern engineering tools.
|
|