Conference Session

The Evolution of Engineering Economy

Collection

2007 Annual Conference & Exposition

Authors

Joseph Hartman, Lehigh University; David Enke, University of Missouri

Tagged Divisions

Engineering Economy

Conference Session

Engineering Economy: Beyond the Classroom

Collection

2007 Annual Conference & Exposition

Authors

Donald Remer, Harvey Mudd College; Karen Ahle, Raytheon; Kevin Alley, Southwest Research Institute; John Silny, Raytheon; Karen Hsin, Accenture; Elijah Kwitman, Harvey Mudd College; Allison Hutchings, Harvey Mudd College

Tagged Divisions

Engineering Economy

projects in industry and government go way overbudget or schedule.1-4 There are a lot of reasons for this, but one of the major reasons is that theengineers did an insufficient job on the estimate. One of the key reasons is that few engineeringstudents get sufficient cost estimation training while they are in college. As a result, manyindustrial and governmental organizations are giving their practicing engineers and engineeringmanagers short courses (one to five days) in cost and schedule estimation. There has been astrong push by companies and government organizations to enhance the cost estimationknowledge and in some cases organizations are requiring their engineers and engineeringmanagers to obtain professional society certifications in cost

Conference Session

Effective Tools for Teaching Engineering Economy

Collection

2007 Annual Conference & Exposition

Authors

Phil Rosenkrantz, California State Polytechnic University-Pomona

Tagged Divisions

Engineering Economy

redesign of the course to integrateconstructivist approaches for on-line learning environments. Instructional and outcomesassessment data, as well as demographic and tools usage survey data (including the results of alearning styles survey) was collected for each class. This paper will: (1) Compare the before andafter instructional assessment and outcomes assessment data for the course; and (2) Analyze thepatterns of learning tool usage based on demographic variables. Innovative uses of instructionaltechnology discovered along the way will also be presented.The paper is organized into the following parts:1. Introduction2. On-line teaching options, strategies, and considerations3. Teaching strategies and learning activities for

Conference Session

Applications of Engineering Economy

Collection

2008 Annual Conference & Exposition

Authors

John Robertson, Arizona State University; Michael Kozicki, Arizona State University; Slobodan Petrovic, Arizona State University

Tagged Divisions

Engineering Economy

of itsapplications. However, these features are also its greatest weakness. Hardly a weekpasses without some new nano-product or material being touted as the miracle solutionthat will drive the next wave of high-tech development 1. The reality is that few of theseclaims will be realized in the form predicted. Even the developments that eventuallysucceed will have a tortuous and demanding evolution path. How does anyone make abalanced assessment of new technology that captures its novelty and the imagination ofthe innovators but at the same time acknowledges that realistic business criteria will alsobe applied? This paper describes a simple process to derive a measure of the maturity ofnew technologies in many economic as well as technical

Conference Session

Applications of Engineering Economy

Collection

2008 Annual Conference & Exposition

Authors

Donald Merino, Stevens Institute of Technology; Jakob Carnemark, SKANSKA

Tagged Divisions

Engineering Economy

series of data center designs that resulted in various levels of downtimeper year. Thus, a Tier I design was estimated to have 28.8 hours/year of downtime versus Tier IIwith 22 hours/year, Tier III with 1.6 hours/year and Tier 4 with .8 hours/year. Downtimeestimates were based on the Uptime Institute Field Data8.Decision Process for an Optimal SolutionA decision model is required to determine the optimal economics. The most prevalent industryapproach is to use an After Tax Analysis (ATA)1. Appendix I – Figure 2 is a description of atypical ATA decision process. Appendix II is a more detailed description of the 8 major steps inthe Figure 1 decision process1

Conference Session

Engineering Economy -- Outside the Introductory Course

Collection

2008 Annual Conference & Exposition

Authors

Neal Lewis, University of Bridgeport; Ted Eschenbach, TGE Consulting

Tagged Divisions

Engineering Economy

addresses two main questions: 1) areengineering economics instructors familiar with real options analysis, and 2) to what extent arewe teaching real options in US engineering schools.A Real Options ExampleIn previous work6 we analyzed a more typical engineering project, where the value of waiting for Page 13.1023.3more information to make a better decision (real option) is more than offset by the cost of notimmediately deciding (lost revenue). The example is of a drug company awaiting approval for anew drug from the Food and Drug Administration (FDA) with the decision expected in twoyears. The drug will have patent protection for ten years after

Conference Session

Engineering Economy -- Outside the Introductory Course

Collection

2008 Annual Conference & Exposition

Authors

William Peterson, Arizona State University

Tagged Divisions

Engineering Economy

: (1) cost-benefit ratio(under which net benefits, rate of return, and payback period are included) and (2) return oninvestment. The discussion is less than a page and no numerical example is given. Again anengineering text ignores the time value of money and this time seems to endorse ROI, since it iswidely used.A Somewhat Problematic ExampleIn a project management text4 – and one this author has used for years – there is a section onnumerical models used in problem selection in which the authors of the text briefly discuss, in Page 13.1274.3order: (1) payback period, (2) average rates of return, (3) discounted cash flow (net presentworth

Conference Session

Applications of Engineering Economy

Collection

2008 Annual Conference & Exposition

Authors

Benjamin Kelley, Baylor University; Robert Doty, Baylor University; Bill booth, Baylor University; Cynthia Fry, Baylor University

Tagged Divisions

Engineering Economy

that suchknowledge is needed for their graduates to distinguish themselves. The need for theglobalization aspect has been fueled largely by improvements in transportation, communication,and manufacturing.1, 2 These technological advances have influenced and altered how businessand commerce are conducted domestically and globally, and the organizational structuresinternational corporations employ.3 It is interesting that the very innovations developed withinthe technology sector have the competing effects of increasing the need to add technical focusand specificity, while simultaneously increasing humanistic- and business-related content.4Increasingly, the technological knowledge associated with an engineering or computer sciencedegree is not

Conference Session

Engineering Economy -- Outside the Introductory Course

Collection

2008 Annual Conference & Exposition

Authors

Peter Boerger, Engineering Economic Associates, LLC

Tagged Divisions

Engineering Economy

showing the potential for useful interaction in helping economists with theirprimary work, some definitions are needed to place the two fields relative to each other. If weare to understand the relative place of economics and engineering economy, textbook definitionswill not be helpful. What we need is an understanding of the purpose of these two fields.Economics, I suggest, is inherently concerned with public policy decision-making. While truethat much of economics is concerned with understanding the decisions of and interactionsbetween private economic actors, it does so with the ultimate end of understanding how we allcan survive and prosper together in the face of 1) nature, which has no inherent interest infeeding us, and 2) other economic

Conference Session

Engineering Economy -- The Introductory Course

Collection

2008 Annual Conference & Exposition

Authors

Rajkamal Kesharwani, Virginia Polytechnic Institute and State University; Xiaomeng Chang, Virginia Polytechnic Institute and State University; Janis Terpenny, Virginia Polytechnic Institute and State University; william sullivan, Virginia Polytechnic Institute and State University

Tagged Divisions

Engineering Economy

resource of Engineering Economy Page 13.331.3education in the future after contributions are added to the wiki that include teaching materials,example problems, industrial requirements and case studies.User Administration:Using wikidot, a popular website which enables users to make their own wikis, we created thesite for engineering economy9. As shown in Figure 1, the wiki is organized so that visitors canlearn about the Fundamentals of Engineering Economy or they may choose to view exampleproblems and cases in several topics that have been posted by members. Figure 1: Introduction page of the wiki siteAny person can

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

topic couldbe assistance in alleviating the current home-mortgage difficulties.In essence the proposed study includes three major components: 1- A new concept of cost to be charged for home mortgages. 2- Establishment of the term of a mortgage loan by tying it to the individual’s ability to pay. 3- A proposal to permit the deduction of rent from federal income tax for the purpose of assisting in the accumulation of a down payment for the purchase of a home mortgage.The students will be involved in evaluating this proposal through qualitative and quantitativemethods in their analysis of the impact of such a policy on the current and future fiscal health ofthe nation.The content of this paper will not be without controversy. But it

Conference Session

Frontiers in Engineering Economy

Collection

2009 Annual Conference & Exposition

Authors

Robert Lundquist, Ohio State University

Tagged Divisions

Engineering Economy

the asset must be determined. Next therecovery period is used to determine the correct column in the MACRS percentage table.Finally the percentage from that table corresponding to the recovery year of interest ismultiplied by the basis of the asset to find the amount of the depreciation for that year.1. HistoryBefore ACRS the IRS published guidelines for acceptable asset lives for tax purposescalled Asset Depreciation Ranges or ADRs. The depreciation method could be chosenfrom any of the commonly used accounting methods, straight line, sum of years digitsand declining balance using 150%, 175% and 200%. In most cases the company waspermitted to switch one time from any of these methods to any other. Salvage valueswere also somewhat arbitrary

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

benefitsand the costs are needed in order to calculate the option value. In the last few years, theliterature has had several examples where authors use multiple interest rates and differentcompounding assumptions for calculating present values. For example, “first” costs are almostalways discounted using a continuous risk-free interest rate while later cash flows are oftendiscounted using discrete market interest rates.This paper focuses on the compounding assumptions. Two approaches are used: (1) Real optionarticles in Harvard Business Review, Journal of Finance, and The Engineering Economist aresurveyed over matching periods to determine typical practices; and (2) A realistic delay optionexample is analyzed. The goal is to determine whether

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

. Page 14.782.1© American Society for Engineering Education, 2009 Interesting Different Decision ProblemsIntroductionConsider a choice among three used cars based upon three criteria, miles, price, and year. Year isused as a proxy for other features, such as an adjustable seat and so forth, that have been addedto cars over time. The three cars have the following values on the criteria: Criterion miles price year 1 45K $8K 2000 Car 2 100K $9K 1995 3 60K $10K 1998 Figure 1

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

will be discussed. 1. IntroductionRevenue management is a newly emerging topic in engineeringmanagement, business management, and operations research that is beingtaught as an elective in business schools of numerous universities in the USand Europe (Columbia University and Northwestern University in the USand INSEAD in Europe to name a few). Revenue management is arelatively new topic in operations research. It was born in the 1970s out ofthe pioneering work of Littlewood4. It was loosely associated with a bunchof techniques used by airlines to intelligently price their seats. However, itwas in the mid-eighties that it gradually developed into a science. In thosedays, it was called “yield management.” American Airlines played a

Conference Session

Advances in Engineering Economy Pedagogy

Collection

2009 Annual Conference & Exposition

Authors

John Ristroph, University of Louisiana, Lafayette

Tagged Divisions

Engineering Economy

improvement.FactorsA hundred years ago, tables were used to provide the values of interest formulas that were diffi-cult to evaluate using slide rules. The slide rules have disappeared, but not the tables. At first,tables seem to be a convenience, but they require spending valuable classroom time to teach themechanics of factors. For example, consider the problem shown in Figure 1. Given deposits of$3,000 at times 2, 3, …, 30, what equal amounts can be withdrawn at times 39, 40, …, 63? Thisis a three-step problem using factors. 1. Determine the equivalent (i.e., the account E30 E38 balance) at time 30: 3,000 E30 = 3,000(F|A, i, 30-1) (1

Conference Session

Innovation in Teaching Engineering Economics

Collection

2006 Annual Conference & Exposition

Authors

J. Cunha, University of Alberta

Tagged Divisions

Engineering Economy

evaluation.Reference 2 indicated the fast-changing requirements of the oil industry, where there is anexpectancy that young professionals will be prepared to exercise leadership, deal with businessissues and implement policies that will contribute to corporate success and profitability. Theseissues were previously mentioned in Ref. 3, where oil industry executives pointed out that, whilethe majority of students are technically well prepared, they lack business related skills andknowledge of current major financial challenges faced by the industry.The course “Advanced Resources Economic and Risk Analysis” was designed having in mindthe abovementioned set of conditions. The main idea was to (1) give the students a review on thebasics of Engineering Economy; (2

Conference Session

Innovation in Teaching Engineering Economics

Collection

2006 Annual Conference & Exposition

Authors

Karen Bursic, University of Pittsburgh

Tagged Divisions

Engineering Economy

curriculum.11MethodIn both the fall of 2005 and spring of 2006, students were required to choose one of thefollowing two contemporary problems: 1) Implementing RFID (Radio Frequency Identification) technology - In this case, students were to assume the role of Vice President of Operations or owner of a business that supplies products to a retailer such as Wal-Mart. Their company is being asked to comply with standards that force them to include RFID on all of their products. 2) Outsourcing production operations overseas - In this case, students were to assume the role of Vice President of Operations or owner of a large U.S. based manufacturing company. The company must decide whether to outsource some or all

Conference Session

New Topics in Engineering Economics

Collection

2006 Annual Conference & Exposition

Authors

Charles Nippert, Widener University

Tagged Divisions

Engineering Economy

, theclass was told the average grades of students using laptops and of students using calculators.From the test averages students knew there was no incentive from the standpoint of grades forthe use of either tool. Laptop availability was not a problem because there were a number oflaptops available from the university and, many students borrowed laptops from friends. Allstudents who used laptops used the Excel spreadsheet so in this paper I use “computer solution”and “spreadsheet solution” interchangeably.Allowing both the use of laptops AND calculators in the same test required some revision of thetest procedures. Some important considerations regarding the nature of the test questions are:1. All tests (hour quizzes and the Final Exam) were

Conference Session

New Topics in Engineering Economics

Collection

2006 Annual Conference & Exposition

Authors

John Ristroph, University of Louisiana-Lafayette

Tagged Divisions

Engineering Economy

before or after duedates using either paper or the Internet. In any case, and it does not take long before homeworkfiles are created and exchanged. It is appropriate to explore alternatives to current homeworkpractices, and the next section presents a feasibility study consisting of a survey that solicitedstudents’ input.SurveyStudents in two engineering economics sections learned of their progress in the course by receiv-ing the results of their first test shortly before receiving the email survey shown in Table 1. Eachof the test’s ten problems was based on a homework question. The results were clearly bimodal,with 54% of the students earning A’s or B’s and 41% having D’s or F’s. The design of the testshould have rewarded mastery of the

Conference Session

Industrial Engineering Division Tech Session 2, IE-ing the Classroom

Collection

2017 ASEE Annual Conference & Exposition

Authors

Dia St. John, University of Arkansas; Eric Specking, University of Arkansas

Tagged Divisions

Engineering Economy, Engineering Management, Industrial Engineering

engineering fields, especially industrialengineering. Most outreach literature, focuses on the recruitment of students, content, and theimpact on participants. In 2015, the authors, St. John and Specking, proposed a framework toadapt college-level lessons for outreach activities.[5] This work will 1) discuss a modifiedversion of the 2015 framework that emphasizes implementation, assessment, and continuousimprovement, 2) provide an example application that was successfully implemented at multiplesections of a University of Arkansas summer camp with assessment data, and 3) provide anadditional example of a previously implemented activity to emphasize the cycle ofimplementation, assessment, and improvement. The University of Arkansas used pre and

Conference Session

Engineering Economy Division Technical Session 2

Collection

2017 ASEE Annual Conference & Exposition

Authors

Isaac W Wait, Marshall University; Sameh M. El-Sayegh, American University of Sharjah; Salwa Mamoun Beheiry, The American University of Sharjah

Tagged Divisions

Engineering Economy

from the George Washington University and a First Class Honours Bachelors of Science from Reading University (UK). c American Society for Engineering Education, 2017 Using concept inventories to gauge preparedness and assess learning objectives in engineering economy classesAbstractA ten-question, multiple-choice Concept Inventory was developed and administered to studentsat two universities: (1) students enrolled in a “Cost Analysis” course at an English-language,ABET-accredited Civil Engineering program outside of the United States, and (2) studentsenrolled in an “Engineering Economy” course utilized by students in civil, mechanical, andelectrical engineering, along with computer science

Conference Session

Engineering Economy Division Technical Session 3

Collection

2017 ASEE Annual Conference & Exposition

Authors

James D Burns, Purdue Univeristy; Bob E. White P.E., Western Michigan University

Tagged Topics

Diversity

Tagged Divisions

Engineering Economy

, there are challenges to this approach, not the least of which is the relatively short timestudents have to learn and apply a new programming language. As with most instructionalchallenges, finding the right approach for the situation is more desirable than attempting tobalance between extreme options (leaving students to learn on their own versus providing acomplete tutorial on VBA programming). Our intent here is to introduce the approach taken forthis course in order to highlight those aspects we believe are most critical to success.InstructionOverviewThe project begins during the first week of class and concludes during the last meeting. Theproject is administered in three phases, with the model-building activities performed duringPhase 1

Conference Session

Engineering Economy Division Technical Session 3

Collection

2017 ASEE Annual Conference & Exposition

Authors

Ted Eschenbach, TGE Consulting; Jerome P. Lavelle, North Carolina State University; Neal A Lewis, University of New Haven

Tagged Divisions

Engineering Economy

sector—not toward individual engineers and certainly not students.Note that J.G. Thuesen and Sullivan (1999) is an interesting review of engineering economy’shistory by the lead authors of later editions of these two titles.Personal finance topics in more recent textbooks: Our assessment of the inclusion of personalfinance topics in engineering economy textbooks in the 1970s through the mid-1990s issummarized in Table 1. That time period was chosen because it seems to have the largestnumbers of titles with a broader variety of chosen coverage. Most currently available texts arelater editions of these titles.From Table 1 it is clear that as a group, undergraduate textbooks in engineering economics havenot made the inclusion of personal finance

Conference Session

Engineering Economy Division Technical Session 2

Collection

2017 ASEE Annual Conference & Exposition

Authors

Kate D. Abel, Stevens Institute of Technology (School of Engineering and Science)

Tagged Divisions

Engineering Economy

two different hypotheses being tested are: the difference in the means for the final exam scores for the two populations, and the difference in the means for the overall course scores for the two populations. Null hypothesis 1: Ho: µ final exam score 2015F = µ final exam score 2016F Null hypothesis 2: Ho: µ overall class score 2015F = µ overall class score 2016FThe samples are assumed to be independent, and normally distributed. The variance forboth populations is unknown, but we’ve pooled the sample variances to estimate thepopulation parameter. We’ll assume that 𝜎!! = 𝜎!! , and select 𝛼 = 0.05.Given 𝑛! = 117 and 𝑛! = 144, the degrees of freedom is 117 + 144 − 2 = 259.With 𝛼 2 = 0.025, the critical 𝑡 statistic is

Conference Session

Engineering Economy Division Technical Session 3

Collection

2017 ASEE Annual Conference & Exposition

Authors

Gilbert C Brunnhoeffer III P.E., Roger Williams University

Tagged Divisions

Engineering Economy

evaluatereplacement street lighting for municipalities. Of course, the analysis suggested is slanted1ftp://ftp02.portlandoregon.gov/PBOT/Chi/COP%20Signal%20&%20St%20Lighting%20Reference/COP%20St%20Lighting%20Reference/LED%20Lights/Leotek.LED.Streetlight.Guide.V7-101613.pdftoward their LED product but the analysis steps are a fair representation of how one mightanalyze the decision at the city engineer level.The basic decision is, do we spend money now to put a more expensive (purchase price) cobrastyle street light head with LEDs on the existing poles? As part of the process the problem wasdivided into four parts; 1) gathering data on representative costs of purchasing commercial streetlight heads (both sodium vapor and LED), 2) determining the

Conference Session

Engineering Economy Division Technical Session 2

Collection

2017 ASEE Annual Conference & Exposition

Authors

Robert P. Leland, Oral Roberts University

Tagged Topics

Diversity

Tagged Divisions

Engineering Economy

, Technology Review, andvarious web based venues. They are assigned and due the next lecture. Students must read ashort article, and write a ½ - 1 page summary. All students turning in a reasonable paper receivefull credit. The focus is on content and exposure, rather than on composition and in-depthanalysis.Some of the readings I have used include:Woman Who Couldn’t Be Intimidated by Citigroup Wins $31 Million11, A manager inCitigroup’s Mortgage division becomes a whistleblower exposing improper mortgage practicesat Citigroup. This reading reinforces the importance of integrity, and addresses a principal causeof the recession of 2008.Professor on quest for India’s hidden Inventors12. Management professor Anil Gupta travelsthrough rural India to find

Conference Session

Industrial Engineering Division Tech Session 2, IE-ing the Classroom

Collection

2017 ASEE Annual Conference & Exposition

Authors

Paul C. Lynch, Penn State Erie, The Behrend College; Joseph Wilck, College of William & Mary; Amanda Elizabeth VanBuskirk

Tagged Divisions

Engineering Economy, Engineering Management, Industrial Engineering

went to:  Check Grades  Check Attendance  Check Course Calendar for Upcoming Deadlines, Quizzes, Exams - The ANGEL Calendar also contained the breakdown of coverage on exams and quizzes  Print Lecture Notes (Unedited and Edited)  Print Lab Procedures (for IE MFG course)  Print Assignments  Submit Assignments  Send EmailsData were collected in both courses regarding student satisfaction with the instructor, course,communication in the course, and the use of the course management system. Table 1 belowbreaks down the course semesters and enrollments for the data collection.Table 1: Course and Enrollment Statistics for Data Collection Course/ Semester Enrollment

Conference Session

Industrial Engineering Division Tech Session 2, IE-ing the Classroom

Collection

2017 ASEE Annual Conference & Exposition

Authors

Nadiye O. Erdil, University of New Haven

Tagged Topics

Diversity

Tagged Divisions

Engineering Economy, Engineering Management, Industrial Engineering

individual efforts and the ability level that can be reached under adult guidance or incollaboration with more capable peers.1 Guidance can be provided by helping the learner tofocus on particular aspects of the problem by asking leading questions or providing starterinformation, or simplifying some of the details.2Scaffolding provides a structure that helps students construct knowledge by building newknowledge and competencies upon their existing abilities. It is commonly used in writing andusually given in one the following three forms: 1) breaking up an assignment into smallerassignments, 2) keeping assignment constant but increasing the difficulty of materials, or 3)creating a scaffold within a single assignment. 3 The levels of learning based

Conference Session

Engineering Economy Division Technical Session 3

Collection

2017 ASEE Annual Conference & Exposition

Authors

Billy Gray, Tarleton State University; Daren Davis, Tarleton State University; Erick C Jones P.E., University of Texas, Arlington

Tagged Divisions

Engineering Economy

economic analysis after it has been implemented. As many of ourpartners implement and utilize the capstone projects, it is important for our students tounderstand how the projects are evaluated so that they can conduct a better analysis of theprojects in the beginning. As we continue to look at our courses and implement projects, we willcontinue to bring more examples into the course.References1. Anwar, S., & Ford, P. (2001). Use of a case study approach to teach engineering technology students. International journal of electrical engineering education, 38(1), 1-10.2. Dixon, G., & Wilck, J. (2014). Integrating Economic Analysis into Capstone Course. 121st ASEE Annual Conference and Exposition. Indianapolis: American Society