Title Material - Engineering Economy I.docx ✅

SPECIAL TOPICS III ENGINEERING ECONOMY: TERMINOLOGIES ENGINEERING – It is the profession in which knowledge of the mathematical and natural sciences gained by study, experience and practice is applied with judgment to develop ways to utilize economically the material and forces of nature for the benefit of mankind. Engineering is a science. ECONOMICS - It is the science that deals with the production and consumption of goods and services and the distribution and rendering of these for human welfare. Economics is both science and art. ENGINEERING ECONOMICS  It deals with the methods that enable one to take economic decisions towards minimizing costs and/or maximizing benefits to business organizations.  In the simplest of terms, it is a collection of techniques that simplify comparisons of alternatives on an economic basis.  It is not a method or process for determining what the alternatives are. On the contrary, it begins only after the alternatives have been identified. Difference of Economy and Economics Compariso n ECONOMICS ECONOMY Definition Economics is the science and art of decision making, regarding the use of scarce resources, under the conditions of scarcity, to attain maximum satisfaction. When a country or a geographical region is defined in the context of its economic activities, it is known as economy or economic system. Deals with Theory and Principle Practical Application Determines to How human beings make decisions when there is scarcity of resources? How are resources allocated among different members of society? Focuses on The way in which economic agents behave and interact and the way in which economies work. The way in which country’s economic affairs are organized and conducted. PRINCIPLES OF ENGINEERING ECONOMICS  PRINCIPLE 1: Develop the Alternatives  PRINCIPLE 2: Focus on the Differences  PRINCIPLE 3: Use a Consistent Viewpoint  PRINCIPLE 4: Use a Common Unit of Measure  PRINCIPLE 5: Consider All Relevant Criteria  PRINCIPLE 6: Make Risk and Uncertainty Explicit  PRINCIPLE 7: Revisit Your Decisions FOUR TYPES OF EVALUATION  FORMATIVE Used to make early improvements, evaluate the quality, and to ensure that the program is aligned with its intended goals. It is done at the beginning of the project  SUMMATIVE Used to demonstrate the effectiveness of a program. It is done at the end of the project  PROCESS Used to explore how a program was implemented. It is done during the premise of the project.  OUTCOME
Used to understand the longitudinal impact across individuals during a certain timeframe. It is done at the end of the program.