WAYNE STATE UNIVERSITY Industrial and Systems Engineering IE 4850 Engineering Economy (3 Credits) Course Syllabus Fall 2018
Instructor: Dr. Murat Yildirim, Classroom: 1165 Main Contact: [email protected] Office: 4815 Fourth Street, Detroit, MI 48201, Room 2049 Office Hours: Monday 3-5PM
TA: Farnaz Fallahi TA Contact: [email protected] TA Office: 4815 Fourth Street, Detroit, MI 48201, Room 1052 TA Office Hours: Tuesday 1-3PM
Textbook: Engineering Economic Analysis by Donald G. Newnan, Ted G. Eschenbach and Jerome P. Lavelle, Oxford University Press; 13 Edition (2017). ISBN-10: 0190296909 or ISBN-13: 978-0190296902.
Course Description: ➢ What is Engineering Economy? Also known as engineering economics, is a subset of economics for application to engineering projects. Fundamentally, engineering economics involves formulating, estimating, and evaluating the economic outcomes when alternatives to accomplish a defined purpose are available. Considering the time value of money is central to most engineering economics analyses as well as inflation, uncertainty, depreciation and taxes.
➢ What position does Engineering Economy have in Engineering? It is a topic on the Fundamentals of Engineering examination, and questions might also be asked on the Principles and Practice of Engineering examination; both are part of the Professional Engineering registration process.
➢ What position does Engineering Economy have in Economics? Since engineering is an important part of the manufacturing sector of the economy, Engineering Economy is an important part of industrial or business economics.
➢ What are the specific learning outcomes of this course? By the end of this course, students will learn how to: 1. Build mathematical models to represent complex investment opportunities involving benefits and costs occurring at different time periods. 2. Employ engineering economy tools such as net present value, equivalent uniform annual worth, internal rate of return, payback period and benefit-to-cost-ratio to compare different options and identify optimal investment decisions.
3. Quantify and model risk in economic decision making. 4. Model depreciation for different classes of assets.
Course Format: Class will be a mix of Lectures, In-class Discussions and Exercises, Homework Assignments and a Group Term Project. Most of the class materials will be posted on http://canvas.wayne.edu
A - Exams: There is no comprehensive exam and the whole book is divided into thirds for equally valued exams. Therefore, the students only have one preparation for each part of the book and after taking the associated exam they are done with it.
B - Group Term Project: This class requires completion of a group term project. It is not mandatory but teams of 3-4 members are recommended. Possible options, that all need in-class or online presentation, include (but not limited to): • Analyze a real investment (Capital Budgeting) case specially the one you have some kind of feeling for. • Exploring and analyzing the job market within the domain of Engineering Economy. • Finding and analyzing novel, educative and interesting materials within the domain of Engineering Economy. • Analyze an accredited research article within the domain of Engineering Economy. • Analyze a software within the domain of Engineering Economy. • Other types of project may also be accepted upon instructor approval.
C - Homework Assignments: Homework assignments will be posted on http://canvas.wayne.edu and announced in class. Depending on the size of the class and length of the homework, individual homework grades could be based on randomly sampled problems. Students are strongly encouraged to use Excel templates from Course/Book website to complete the homework. Collaboration during the conceptualization and formulation process of homework assignments is allowed. However, all homework assignments must be completed and written up individually. Violation of this policy will certainly lead to a failing grade for the homework and action that is more stringent might be taken.
D - Attendance Policy: Students’ attendance during the term will affect their final score. Besides, students attending any given class are required to join the class before it starts to minimize any disruptions.
2
Special Needs: If you feel that you may need an accommodation based on the impact of a disability, please feel free to contact me privately to discuss your specific needs. Additionally, the Office of Educational Accessibility Services (EAS) coordinates reasonable accommodations for students with documented disabilities. The office is located in the Student Center Building, Room 583, Phone: 313-577-1851 (Voice) 313-577-3365 (TTY).
Cheating/Conduct Policy: It is the responsibility of each student to adhere to the principles of academic integrity. Academic integrity means that a student is honest with him/herself, fellow students, instructors, and the University in matters concerning his or her educational endeavors. Additional class policies established by the instructor are as follows: 1- As a courtesy, communication devices should be turned off or set to vibrate during class and if cellular phone call is necessary during lecture sessions the student is expected to exit the classroom and return when done. 2- No talking with classmates is allowable unless it is a Discussion Time that is announced by the instructor.
Deferred Grades Policy: A grade of 'I' can only be assigned if 1- the student IS NOT currently failing the class and, 2- there is NOT a substantial quantity of work yet to be completed and, 3- there is no extra work required of the instructor beyond the normal duties of grading the paper/exam and, 4- there is no need for the student to attend the class in subsequent terms. The final decision to assign an incomplete grade rests with the instructor. A 'I' grade MUST be made up within one year of assignment of the grade.
Grading: Letter grades will be given in “straight scale” fashion, as follows: A=90.0-100; B=80.0- 89.99; C=70.0-79.99; D=60.0-69.99; E=50.0-59.99; F=Below 50.0. The instructor reserves the right to use “+” and “-“grades, such as “A-“, “B+”, etc., for students with scores that are very near or exactly at a border between grades.
TENTATIVE GRADING (SUBJECT TO CHANGE): EXAMS (3) 3 * 25 = 75 pts GROUP TERM PROJECT 10 pts HOMEWORK ASSIGNMENTS 5 pts IN-CLASS DISCUSSION / ATTENDANCE 10 pts OVERALL TOTAL: 100 pts
3
Tentative Schedule: Wednesday (August 29) Ch1: Making Economic Decisions Monday (September 03) Wednesday Ch2: Engineering Costs and Cost Holiday Estimating Monday (September 10) Wednesday Ch3: Interest and Equivalence Ch4: Equivalence for Repeated Cash Flows Monday (September 17) Wednesday Ch4: Equivalence for Repeated Cash Flows Ch5: Present Worth Analysis Monday (September 24) Wednesday Ch5: Present Worth Analysis Ch6: Annual Cash Flow Analysis Monday (October 01) Wednesday Ch6: Annual Cash Flow Analysis Ch7: Rate of Return Analysis Monday (October 08) Wednesday 1st Exam Ch7: Rate of Return Analysis Monday (October 15) Wednesday Ch8: Choosing the Best Alternative Ch8: Choosing the Best Alternative Monday (October 22) Wednesday Ch9: Other Analysis Techniques Ch9: Other Analysis Techniques Monday (October 29) Wednesday Ch10: Uncertainty in Future Events Ch10: Uncertainty in Future Events Monday (November 05) Wednesday Ch11: Depreciation Ch11: Depreciation Monday (November 12) Wednesday 2nd Exam Ch11: Depreciation Monday (November 19) Wednesday Ch13: Replacement Analysis Ch13: Replacement Analysis Monday (November 26) Wednesday Ch15: Selection of a Minimum Attractive Ch13: Replacement Analysis Rate of Return Monday (December 03) Wednesday Ch15: Selection of a Minimum Attractive Ch15: Selection of a Minimum Attractive Rate of Return Rate of Return Monday (December 10) Ch16: Economic Analysis in the Public Sector December 12-18 Final Exam
4