Chapter1 - McGill Faculty of Engineering MIME 310 Engineering Economy Chapter 1 Introduction The need for Engineering Economic Analysis and some

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McGill Faculty of Engineering MIME 310 Engineering Economy hapter 1 – troduction The need for Engineering Economic Analysis and some important fundamental economic concepts Chapter 1 Introduction Outline Section 1: Where does Engineering Economy fit in? • Definitions Section 2: What is Engineering Economic Analysis Section 3: How the Pieces Fit Together Section 4: Basic Economic Concepts • Demand / Supply • Production Function • Production Cost Function 1
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McGill Faculty of Engineering MIME 310 Engineering Economy ection 1: Definitions Section 1: Definitions Economics Study of how society, i.e. individuals, businesses and government, should allocate scarce resources to the production and distribution of goods and services to the appropriate consumers. Allocation Distribution SCARCE RESOURCES PRODUCTION MARKET - Land - Labour - Capital - Goods - Services - Right time and place - Right clients - Managerial skills - Right quantity and quality 2
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McGill Faculty of Engineering MIME 310 Engineering Economy ection 1: Definitions Section 1: Definitions Microeconomics Analysis of the economic behaviour of individual decision- making units in a free market economy Issues: • Supply and demand of goods and services • Price and production costs of goods and services • Objectives (profit, growth and survival) and competitiveness of business firms • Theory of production 3
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McGill Faculty of Engineering MIME 310 Engineering Economy ection 1: Definitions Section 1: Definitions Macroeconomics Analysis of aggregate behaviour at the national and international levels Issues: • Level of growth of consumption and income • Level and trends in prices, wages and investment • Government policies and incentives • Interactions between businesses, government and society, and between business sectors 4
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McGill Faculty of Engineering MIME 310 Engineering Economy ection 1: Definitions Section 1: Definitions Finance Study of how businesses raise, manage and spend capital Issues: • Sources and costs of funds • Capital markets • Dividend policies p • Capital budgeting 5
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McGill Faculty of Engineering MIME 310 Engineering Economy ection 1: Definitions Section 1: Definitions Engineering Application of technology, guided by economic principles , to the design, implementation and operation of systems and processes. Engineering Economic Analysis 6
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McGill Faculty of Engineering MIME 310 Engineering Economy hapter 1 – troduction Chapter 1 Introduction Outline Section 1: Where does Engineering Economy fit in? • Definitions Section 2: What is Engineering Economic Analysis Section 3: How the Pieces Fit Together ection 4: Basic Economic Concepts Section 4: Basic Economic Concepts • Demand / Supply • Production Function roduction Cost Function • Production Cost Function 7
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McGill Faculty of Engineering MIME 310 Engineering Economy ection 2: Engineering Economic Analysis Section 2: Engineering Economic Analysis Engineering Design PROJECT DESIGN SUES Design issues at the development, plementation and operation stages ISSUES
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This note was uploaded on 11/22/2010 for the course MIME MIME 310 taught by Professor Jassim during the Winter '09 term at McGill.

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Chapter1 - McGill Faculty of Engineering MIME 310 Engineering Economy Chapter 1 Introduction The need for Engineering Economic Analysis and some

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