Lecture2_Cost_Engineering

Lecture2_Cost_Engineering - EGR 102 Introduction to...

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1 EGR 102 Introduction to Engineering Modeling EGR 102 Lecture 02 1 Cost Engineering EGR 102 Before you take your seat Before you take your seat, place your Lecture HW 01 in the appropriate envelope at the back of the room EGR 102 Lecture 02 2 (printed name, lab section # and PID on top page & pages stapled)
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2 Homework #1 Linear Drag ± ± Drag force proportional to velocity ± Appropriate for low velocity ± Quadratic Drag ± Drag force proportional to velocity ^ 2 EGR 102 Lecture 02 3 ± Appropriate for higher velocity ± Determined by Reynold’s number Background A cost engineering study involves ± A cost engineering study involves examining technical alternatives and expressing their differences in terms of money ± Cost is a general term that often includes EGR 102 Lecture 02 4 investments such as time and other resources
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3 Engineering Decisions General John T Carty Chief Engineer of New York General John T. Carty, Chief Engineer of New York Telephone Co., asked 3 questions to evaluate engineering proposals: ± 1. Why do this at all? ± 2. Why do it now? EGR 102 Lecture 02 5 ± 3. Why do it this way? ± Basis for engineering measurement? ± Cost or $$$ Why do this at all? This question makes an inquiry regarding profi ± This question makes an inquiry regarding profit . The reason for doing something in business is that it is profitable to do so. ± Fundamental question to evaluate proposals: Will it pay? EGR 102 Lecture 02 6
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4 Why do it now? This question asks whether the person(s) ± This question asks whether the person(s) proposing the project examined the time alternative ± Is this the best time ? ± Can we do this later and make more profit ? EGR 102 Lecture 02 7 Why do it this way? Did we consider all other alternatives ? ± Did we consider all other ± Is the solution proposed the most profitable ? ± What are the consequences of doing it this way? EGR 102 Lecture 02 8
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5 An Example ± An engineering executive decides to keep a An engineering executive decides to keep a machine in service even if it experiences frequent breakdowns. ± What are the alternatives? ± What are the consequences? ± Remember that financial efficiency is not the same thing as engineering efficiency EGR 102 Lecture 02 9 ± While evaluating alternatives, the time value of money must be taken into account Cost Engineering Cost Engineering is defined as “ that area of Cost Engineering is defined as that area of engineering practice where engineering judgment
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Lecture2_Cost_Engineering - EGR 102 Introduction to...

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