ClassChapter01.pdf;JSESSIONID=l9KJLG1Wffhxk7dhpcjbjthVLVTl4hctL0TLjjgfxJX9jMvsGmrK!-1653588525!mycou

ClassChapter01.pdf;JSESSIONID=l9KJLG1Wffhxk7dhpcjbjthVLVTl4hctL0TLjjgfxJX9jMvsGmrK!-1653588525!mycou

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1 McGill Faculty of Engineering MIME 310 Engineering Economy 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 Outline The need for Engineering Economic Analysis and some important fundamental economic concepts Chapter 1 – Introduction
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2 McGill Faculty of Engineering MIME 310 Engineering Economy 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. SCARCE RESOURCES PRODUCTION MARKET Allocation Distribution - Land - Labour - Capital - Managerial skills - Goods -Serv ices -R ightt ime and place - Right clients - Right quantity and quality
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3 McGill Faculty of Engineering MIME 310 Engineering Economy 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
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4 McGill Faculty of Engineering MIME 310 Engineering Economy 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
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5 McGill Faculty of Engineering MIME 310 Engineering Economy Section 1: Definitions Finance Study of how businesses raise, manage and spend capital Issues: • Sources and costs of funds • Capital markets • Dividend policies • Capital budgeting
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6 McGill Faculty of Engineering MIME 310 Engineering Economy Section 1: Definitions Engineering Application of technology, guided by economic principles , to the design, implementation and operation of systems and processes. Engineering Economic Analysis
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7 McGill Faculty of Engineering MIME 310 Engineering Economy 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 Chapter 1 – Introduction Outline 3
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8 McGill Faculty of Engineering MIME 310 Engineering Economy Section 2: Engineering Economic Analysis Engineering Design PROJECT DESIGN ISSUES Design issues at the development, implementation and operation stages ANALYTICAL SOLUTIONS Quantitative techniques for the analysis and comparison of options DECISION Choice and implementation of preferred option
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9 McGill Faculty of Engineering MIME 310 Engineering Economy Section 2: Engineering Economic Analysis
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ClassChapter01.pdf;JSESSIONID=l9KJLG1Wffhxk7dhpcjbjthVLVTl4hctL0TLjjgfxJX9jMvsGmrK!-1653588525!mycou

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