Conference Session

Frontiers in Engineering Economy

Collection

2009 Annual Conference & Exposition

Authors

Philip Brach, University of the District of Columbia; Ahmet Zeytinci, University of the District of Columbia; Pradeep Behera, University of the District of Columbia

Tagged Divisions

Engineering Economy

loan (amortized). Fe e Value (A) P rincipal (Not to s cale) Time Uniform Payment of Principal with Fixed Fee Inte re st on Unpa id Ba la nce Value (B) P rincipa l (Not to s cale

Conference Session

Frontiers in Engineering Economy

Collection

2009 Annual Conference & Exposition

Authors

Neal Lewis, University of Bridgeport; Ted Eschenbach, TGE Consulting; Joseph Hartman, University of Florida

Tagged Divisions

Engineering Economy

consistent in continuousdiscounting of future costs while using discrete discounting of future positive cash flows. Theengineering economy literature is not consistent.The use of discrete or continuous interest rates can have a significant effect on the value of theoption, and the choice of compounding method can change the decision outcome. This is not ameaningless topic. We recommend ensuring that consistent assumptions about compoundingand effective interest rate values be made.References1. Amram, M. and Kulatilaka, N. (1999) Real Options, Harvard Business School Press, Boston.2. Black, F. and Scholes, M. (1973) “The Pricing of Options and Corporate Liabilities,” Journal of PoliticalEconomy, 81(3), 637-654.3. Block, S. (2007) “Are ‘Real Options

Conference Session

Advances in Engineering Economy Pedagogy

Collection

2009 Annual Conference & Exposition

Authors

John Ristroph, University of Louisiana, Lafayette

Tagged Divisions

Engineering Economy

⎞ 1+ g z tIf i = g, then ∑ ⎜ ⎟ equals z-a+1; otherwise equation (9) can be used with r equal to t =a ⎝ 1 + i ⎠ 1+ i . Page 14.552.5 Arithmetic gradients at times a, a+1, …, z lead to sums involving the forms z −a+2 z −a+2s (1 + i ) − a +1 ∑ t (1 + i) −t for present worth or s(1 + i) n

Conference Session

Advances in Engineering Economy Pedagogy

Collection

2009 Annual Conference & Exposition

Authors

Abhijit Gosavi, Missouri University of Science and Technology

Tagged Divisions

Engineering Economy

inventorycontrol. Operations Research, 37,183-197, 1989.[2] F. Glover, R. Glover, J. Lorenzo, and C. McMillan. The passenger mix problem inscheduled airlines. Interfaces, 12, 73-79, 1982.[3] A. Gosavi, E. Ozkaya and A. Kahraman. Simulation optimization for simulation forrevenue management of airlines with cancellations and overbooking. OR Spectrum, 29,21-38, 2007.[4] K. Littlewood. Forecasting and control of passenger bookings. In Proceedings of the12th AGIFORS (Airline Group of the International Federation of Operational ResearchSocieties) Symposium), 95-117, 1972.[5] R. L. Phillips. Pricing and Revenue Optimization. Stanford University Press, Stanford,CA, 2005.[6] J. Subramaniam, S. Stidham Jr, and C.J. Lautenbacher. Airline yield management

Conference Session

Advances in Engineering Economy Pedagogy

Collection

2009 Annual Conference & Exposition

Authors

Jane Fraser, Colorado State University, Pueblo; Ray Tsai, Taiwan

Tagged Divisions

Engineering Economy

decision problem becausesome alternative(s) would be dominated. Less obviously, 2B1M and 1M2W also cannot be part ofan interesting decision problem. If an alternative, say A1, has 2B1M, then it will dominate thealternative that has W on the criterion where A1 has M. If an alternative, say A1, has 1M2W, thenit will be dominated by the alternative that has B on the criterion where A1 has M.Thus each alternative in an interesting 3 x 3 decision problem must be one of 7 possibilities:2B1W, 1B2M, 1B1M1W, 1B2W, 3M, and 2M1W. They are listed lexicographically by number ofB values, number of M values, and then number of W values. This ranking is used in thealgorithm to prevent the generation of matrices that are equivalent.The BMW algorithm starts with