Lecture 1 Shahid Iqbal - 6th...
Transcript of Lecture 1 Shahid Iqbal - 6th...
![Page 1: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/1.jpg)
Importance of Engineering Economics
Lecture 1Shahid Iqbal
![Page 2: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/2.jpg)
What is Engineering Economy ???
Engineering economy is a subset of economy for application to engineering projects
![Page 3: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/3.jpg)
Engineers seek solutions to problems, and the economic viability of each potential alternative or design is normally considered along with the technical aspects
![Page 4: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/4.jpg)
Engineering economy involves the evaluation of the costs and benefits of proposed projects
![Page 5: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/5.jpg)
Why Engineering Economy is Important?
There are lots of factors that are considered in making Decisions, these factors are combinations of economic and non economic ones.
• Engineers play a major role in investment by making decisions based on economic analysis and design considerations
![Page 6: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/6.jpg)
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
![Page 7: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/7.jpg)
Role of Engineering Economy in Decision Making
• Engineers make decisions but tools and computers do not.• Tools assist engineers in making decisions.• Decisions affect what will happen in the future and thus the
time frame of engineering economy is the future.• So, engineering economy analysis presents the best estimates
of what is expected to occur.•
![Page 8: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/8.jpg)
Role of Engineering Economy in Decision Making
![Page 9: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/9.jpg)
Understand the Problem
![Page 10: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/10.jpg)
Collect all relevant data/information
![Page 11: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/11.jpg)
Define the feasible alternatives
![Page 12: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/12.jpg)
Evaluate each alternative
![Page 13: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/13.jpg)
Select the “best” alternative
![Page 14: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/14.jpg)
Implement and monitor
![Page 15: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/15.jpg)
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: amount of money at the current time• Future worth: amount of money at some future time• Payback period: Number of years to recover the initial
investment and a stated rate of return.• Rate of return: Compound interest rate on unpaid or
unrecovered balances.• Benefit/cost ratio
![Page 16: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/16.jpg)
There are other factors that affect the decision making such as:
![Page 17: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/17.jpg)
Social
![Page 18: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/18.jpg)
Environmental
![Page 19: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/19.jpg)
Legal
![Page 20: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/20.jpg)
Political
![Page 21: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/21.jpg)
Personal
![Page 22: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/22.jpg)
This may place less reliance on the economic-based factors yet this also shows the importance of knowing all the involved factors including the economic ones
![Page 23: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/23.jpg)
Time Value of MoneyTime Value of Money (TVM) is an important concept
• TVM is based on the concept that money that you hold today isworth more because you can invest it and earn interest
![Page 24: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/24.jpg)
• For instance, you can invest your dollar for one year at a 6% annual interest rate and accumulate $1.06 at the end of the year.
• You can say that the future value of the dollar is $1.06 given a6% interest rate and a one-year period
![Page 25: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/25.jpg)
THINKING LIKE AN ECONOMISTEvery field of study has its own language and its own way of thinking:
![Page 26: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/26.jpg)
Mathematicians talk about integrals, and vector spaces.
![Page 27: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/27.jpg)
Psychologists talk about ego, and cognitive dissonance
![Page 28: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/28.jpg)
Lawyers talk about the legal terms.
![Page 29: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/29.jpg)
Economics is no different. Supply, demand, elasticity, comparative advantage, consumer surplus, deadweight loss—these terms are part of the economist’s language.
![Page 30: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/30.jpg)
Economic Order of Islam
![Page 31: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/31.jpg)
ISLAM is not an ascetic religion and does not aim at depriving Muslims of the 'good things that God has provided' (al-Qur'an, 7: 32).
![Page 32: Lecture 1 Shahid Iqbal - 6th Semester6thsemstuff.weebly.com/uploads/2/6/9/3/26934109/ee_lecture_no_01.pdfShahid Iqbal. What is Engineering Economy ??? Engineering economy is a subset](https://reader034.fdocuments.us/reader034/viewer/2022042921/5f6b7d6493db4953785bc20e/html5/thumbnails/32.jpg)
Virtue therefore lies not in shunning the bounties of God, but in enjoying them within the framework of the values for 'righteous living' through which Islam seeks to promote human welfare.