ENGINEERING ECONOMY FINAL PAPER
TESTED QUESTIONS WITH VERIFIED
ANSWERS COMPLETE STUDY SHEET
●● simple problems
Answer: -do no require much time or effort
-Ex: cash or credit card? semester parking pass or use parking meters?
●● intermediate problems
Answer: -primarily economic
-Ex: buy or lease? which equipment should be purchased?
●● complex problems
Answer: -mix of economic, political, and humanistic elements
-Ex: feasible study of a new automobile plant, planning of new
highways
●● When is engineering economic analysis needed?
Answer: -if the problem is important enough to justify giving it serious
thought and effort
-requires organized analysis (can't be worked in one's head)
-has economic aspects which are important in reaching a decision
,●● What types of questions should engineering economic analysis
answer in general?
Answer: -Which engineering projects are worthwhile?
-Which engineering projects should have higher priority?
-How should the engineering project be designed?
●● What do engineers do?
Answer: Apply science and math to SOLVE PROBLEMS (which
requires us to make decisions)
●● What types of questions should engineering economic analysis
answer about personal decisions?
Answer: -How do I achieve my long-term financial goals?
-How do I compare different ways to finance purchases?
-How do I make short- and long-term investment decisions?
●● What is the decision-making process?
Answer: 1. recognize problem
2. define the goal or objective
3. assemble relevant data
4. identify feasible alternatives
5. select the criterion to determine the best alternative
, 6. construct a model
7. predict the outcomes of each alternative
8. choosing the best alternative
9. audit the result
●● 1. recognize the problem
Answer: -decision making starts with identifying the problem
-once we know problem, we can solve it at best
●● 2. define the goal or objective
Answer: -goal or objective can be general or specific
●● 3. assemble relevant data
Answer: -assembling relevant data is important for a good decision
-data can be published and unpublished
-published data is available easily
-unpublished data may include data from knowledgeable person or from
survey
●● 4. identify feasible alternatives
Answer: -include as many alternatives as possible
-however, it is of little or no use to consider impractical alternative
TESTED QUESTIONS WITH VERIFIED
ANSWERS COMPLETE STUDY SHEET
●● simple problems
Answer: -do no require much time or effort
-Ex: cash or credit card? semester parking pass or use parking meters?
●● intermediate problems
Answer: -primarily economic
-Ex: buy or lease? which equipment should be purchased?
●● complex problems
Answer: -mix of economic, political, and humanistic elements
-Ex: feasible study of a new automobile plant, planning of new
highways
●● When is engineering economic analysis needed?
Answer: -if the problem is important enough to justify giving it serious
thought and effort
-requires organized analysis (can't be worked in one's head)
-has economic aspects which are important in reaching a decision
,●● What types of questions should engineering economic analysis
answer in general?
Answer: -Which engineering projects are worthwhile?
-Which engineering projects should have higher priority?
-How should the engineering project be designed?
●● What do engineers do?
Answer: Apply science and math to SOLVE PROBLEMS (which
requires us to make decisions)
●● What types of questions should engineering economic analysis
answer about personal decisions?
Answer: -How do I achieve my long-term financial goals?
-How do I compare different ways to finance purchases?
-How do I make short- and long-term investment decisions?
●● What is the decision-making process?
Answer: 1. recognize problem
2. define the goal or objective
3. assemble relevant data
4. identify feasible alternatives
5. select the criterion to determine the best alternative
, 6. construct a model
7. predict the outcomes of each alternative
8. choosing the best alternative
9. audit the result
●● 1. recognize the problem
Answer: -decision making starts with identifying the problem
-once we know problem, we can solve it at best
●● 2. define the goal or objective
Answer: -goal or objective can be general or specific
●● 3. assemble relevant data
Answer: -assembling relevant data is important for a good decision
-data can be published and unpublished
-published data is available easily
-unpublished data may include data from knowledgeable person or from
survey
●● 4. identify feasible alternatives
Answer: -include as many alternatives as possible
-however, it is of little or no use to consider impractical alternative
