Economic Decisions & Cost Estimation

Economic Decisions & Cost Estimation - 8/30/2010...

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8/30/2010 1 Decision Making Process & Cost estimation ME 434W ME 434 Decision Making & Cost Estimating 1 Han P. Bao Department of Mechanical Engineering The Production Organization Marketing & Sales Product Development Manufacturing Marketing R&D Customer market system Product design Process Planning Production ME 434 Decision Making & Cost Estimating 2 Sales
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8/30/2010 2 Role of Engineering • What role do engineers play within a firm? – Design - Marketing – Manufacturing - Financial Early career time Later career time •“ No product is technically successful unless it is financially successfu ME 434 Decision Making & Cost Estimating 3 it is financially successful (Dennis Pawley, Chrysler VP of Manufacturing) Why do ME students need to learn Engineering Economics? Your professional work will benefit from it • Your professional work will benefit from it, specially when you become a project manager, or a department supervisor. • You can deal with business transactions in your private life. ME 434 Decision Making & Cost Estimating 4 • Engineering Economics is one of 15 topics required in the FE examination
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8/30/2010 3 Engineering Decisions • Design/Manufacturing role: Ei i k i i ld i d t i lf – Engineering work is involved in every detail of a product’s production, from conceptual design to shipping • Sample Decisions: – New product/process and product/process expansion – Equipment replacement – Cost reduction ME 434 Decision Making & Cost Estimating 5 – Service improvement • Types of operational economic decisions: – Short-term – Long-term Life Cycle of a Product or System 100% Actual expenditure Committed Expenditure Ease of design change ME 434 Decision Making & Cost Estimating 6 Planning & Conceptual Design Time Design and Development Operation & Support Retirement Manufacturing & Acquisition
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8/30/2010 4 The Decision Making Process • A 8-step process: 1. Recognition of a problem 2. Defining goal or objective 5. Selection of judgment criteria 6. Construct model ME 434 Decision Making & Cost Estimating 7 3. Assembly of relevant data 4. Identifying feasible alternatives 7. Determine model outcomes 8. Select best alternative
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This note was uploaded on 10/26/2010 for the course ME 434W taught by Professor Bao during the Spring '10 term at Old Dominion.

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Economic Decisions & Cost Estimation - 8/30/2010...

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