Using Programming and Simulation as a Research Tool in a Graduate Capital Budgeting Course

James D Burns; Bob E. White

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Conference: 2017 ASEE Annual Conference & Exposition
Location: Columbus, Ohio
Publication Date: June 24, 2017
Start Date: June 24, 2017
End Date: June 28, 2017
Conference Session: Engineering Economy Division Technical Session 3
Tagged Division: Engineering Economy
Tagged Topic: Diversity
Page Count: 14
DOI: 10.18260/1-2--29087
Permanent URL: https://peer.asee.org/29087
Download Count: 715

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Paper Authors

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James D Burns Purdue Univeristy orcid.org/0000-0002-2624-1123

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Jim Burns, Ph.D.
Assistant Professor, Department of Technology Leadership & Innovation
Jim joined the faculty at Purdue Polytechnic in 2015 after completing a Ph.D. in Industrial Engineering from Western Michigan University, and has more than 10 years industry experience in the manufacturing sector in a variety of roles including process engineering, operations management, and technical sales. His area of expertise centers on applying OR/MS and Simulation techniques to Supply Chain & Operations Management problems, and has also conducted research in the areas of Human Factors and Work Design for evaluating time and motion efficiencies of operations. Jim also holds an undergraduate IE degree and a Six Sigma Greenbelt.

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Bob E. White P.E. Western Michigan University

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Bob White has a Ph.D. in Engineering Valuation from Iowa State University (1980). He is currently a professor of Industrial and Entrepreneurial Engineering & Engineering Management at Western Michigan University. His interests include entrepreneurial engineering, engineering economy, capital budgeting, and operations control. Dr. White is actively involved as a consultant to industry having been involved with numerous companies. Dr. White has over 20 journal publications and more than 50 articles in conference proceedings. Some of Dr. White’s journal publications include The Engineering Economist, Computers and Industrial Engineering, The International Journal of Modeling and Simulation, and The International Journal of Production Research. His professional affiliations include or have included IIE, ASEE, and SME.

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Abstract

Effectively incorporating research elements into the classroom continues to be an important aspect of graduate engineering education. In this paper, we present an overview of a semester-long research project for a graduate course in Capital Budgeting. At the core of the project is a student-developed Capital Budgeting simulation model. This model is used both as a tool for examining the effectiveness of existing capital project ranking methods such as IRR, NPV, and Payback, and also as a research platform for testing new ranking and selection methods. The project consists of three phases, with the first phase being comprised of individual work where students design and program a basic Capital Budgeting simulation model using Microsoft Excel and Visual Basic for Applications (VBA). During the second phase, students transition into small self-selected teams to validate and then expand the simulation to include more financial elements. This work is performed over the first two-thirds of the semester. The third phase involves teams investigating various project ranking and selection techniques available in the peer-reviewed literature, and they use the simulation model to perform experiments comparing those techniques against each other. Students are also asked to develop and examine new capital project selection techniques that can be applied either to the general Capital Budgeting problem or to specific real-world situations. The project concludes with each team presenting the experimental results to the class.

Grounded in project-based learning principles, this project provides an additional way for students to apply Engineering Economy concepts throughout the course. We outline current instructional techniques, discuss assignments given within each phase, and review the evaluation criteria for each phase and assignment. We also discuss particular instructional challenges we have observed that stem from the varied programming skills, comfort levels with Engineering Economy concepts, industry experiences, academic concentrations, and nationalities we find in the classroom. Finally, we present a preliminary comparison of outcomes related to the quality of simulation models observed after specific instructional techniques related to programming with VBA were modified.

Citation
Format

Burns, J. D., & White, B. E. (2017, June), Using Programming and Simulation as a Research Tool in a Graduate Capital Budgeting Course Paper presented at 2017 ASEE Annual Conference & Exposition, Columbus, Ohio. 10.18260/1-2--29087

TY - CPAPER
AB - Effectively incorporating research elements into the classroom continues to be an important aspect of graduate engineering education. In this paper, we present an overview of a semester-long research project for a graduate course in Capital Budgeting. At the core of the project is a student-developed Capital Budgeting simulation model. This model is used both as a tool for examining the effectiveness of existing capital project ranking methods such as IRR, NPV, and Payback, and also as a research platform for testing new ranking and selection methods. The project consists of three phases, with the first phase being comprised of individual work where students design and program a basic Capital Budgeting simulation model using Microsoft Excel and Visual Basic for Applications (VBA). During the second phase, students transition into small self-selected teams to validate and then expand the simulation to include more financial elements. This work is performed over the first two-thirds of the semester. The third phase involves teams investigating various project ranking and selection techniques available in the peer-reviewed literature, and they use the simulation model to perform experiments comparing those techniques against each other. Students are also asked to develop and examine new capital project selection techniques that can be applied either to the general Capital Budgeting problem or to specific real-world situations. The project concludes with each team presenting the experimental results to the class.

Grounded in project-based learning principles, this project provides an additional way for students to apply Engineering Economy concepts throughout the course. We outline current instructional techniques, discuss assignments given within each phase, and review the evaluation criteria for each phase and assignment. We also discuss particular instructional challenges we have observed that stem from the varied programming skills, comfort levels with Engineering Economy concepts, industry experiences, academic concentrations, and nationalities we find in the classroom. Finally, we present a preliminary comparison of outcomes related to the quality of simulation models observed after specific instructional techniques related to programming with VBA were modified.

AU - James D Burns
AU - Bob E. White P.E.
CY - Columbus, Ohio
DA - 2017/06/24
PB - ASEE Conferences
TI - Using Programming and Simulation as a Research Tool in a Graduate Capital Budgeting Course
UR - https://peer.asee.org/29087
DO - 10.18260/1-2--29087
ER -