Engineering Economics Analysis
Solutions to engineering problems must
promote the well-being and survival of an organization,
embody creative and innovative technology and ideas,
permit identification and scrutiny of their estimated outcomes, and
translate profitability to the “bottom line” through a valid and acceptable measure of merit.
The purpose is to develop and illustrate the principles and methodology required to answer the basic economic question of any design: Do its benefits exceed its cost?
It involves the systematic evaluation of the economic merits of proposed solutions to engineering problems to balance the tradeoffs in the most economical manner, i.e., to minimize the input to obtain expected output or to maximize the output with stated input.
Engineering Economic Analysis Procedure
Problem definition
Development of alternatives
Development of prospective outcomes
Selection of a decision criterion
Analysis and comparison of alternatives
Selection of the preferred alternative
Performance monitoring and postevaluation of results.
Fundamental Principles
Analysis on discounted value (折现分析)
Focus on the differences（关注方案的差异性）
Use a consistent viewpoint（评价立场一致）
Use a common unit of measure（计算口径一致）
Consider all relevant criteria（选择合理的评价标准）
Make uncertainty explicit（减少不确定性）
Revisit your decisions（反馈改进）
