7.01_econ_0 - What do engineers do that they might need to...

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1   M Pore  -  7.01  -  econ 0.ppt What do engineers do that they might need to use economics? Lead companies Lead projects Equipment or process selection and replacement New product development or selection Evaluating new product risk (to the company, to the customer, to society) Develop or select cost reduction procedures Improve service or quality processes etc.
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2   M Pore  -  7.01  -  econ 0.ppt Rational Decision-Making Process 1. Recognize a decision problem 2. Define the goals or objectives 3. Collect all the relevant information 4. Identify a set of feasible decision  alternatives 5. Select the decision criterion to use 6. Select the best alternative
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3   M Pore  -  7.01  -  econ 0.ppt What Makes the Engineering  Economic Decision Difficult?  - Predicting the Future Estimating a  Required investment Forecasting a  product demand Estimating a  selling price Estimating a  manufacturing cost Estimating a  product life
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4   M Pore  -  7.01  -  econ 0.ppt • Engineering Projects Evaluate • Expected Profitability • Timing of Cash Flows • Degree of Financial Risk Analyze • Production Methods • Engineering Safety • Environmental Impacts • Market Assessment Evaluate • Impact on Financial Statements • Firm’s Market Value • Stock Price Role of Engineers in Business
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5   M Pore  -  7.01  -  econ 0.ppt Present Future Past Engineering Economy Accounting Evaluating past performance Evaluating and predicting future events Accounting Vs. Accounting
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6   M Pore  -  7.01  -  econ 0.ppt Two Factors in Engineering Economic  Decisions    The factors of  time  and  uncertainty  are the  defining aspects of any engineering economic  decisions
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7   M Pore  -  7.01  -  econ 0.ppt Types of Strategic Engineering  Economic Decisions in Manufacturing  Sector Service Improvement  Equipment and Process Selection Equipment Replacement New Product and Product Expansion Cost Reduction
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8   M Pore  -  7.01  -  econ 0.ppt Equipment Replacement Problem Now  is the time to replace the  old machine? If not, when  is the right time to  replace the old equipment?
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New Product  and Product Expansion Shall we build or acquire a  new facility to meet the  increased demand? Is it worth
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This note was uploaded on 03/19/2008 for the course EE 366 taught by Professor Pore during the Spring '08 term at University of Texas.

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7.01_econ_0 - What do engineers do that they might need to...

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