Asee peer logo

Engineering Economy at the System Level

Download Paper |


2016 ASEE Annual Conference & Exposition


New Orleans, Louisiana

Publication Date

June 26, 2016

Start Date

June 26, 2016

End Date

June 29, 2016





Conference Session

Engineering Economy Division Technical Session 1

Tagged Division

Engineering Economy

Page Count




Permanent URL

Download Count


Request a correction

Paper Authors


Wolter J. Fabrycky P.E. Virginia Tech Orcid 16x16

visit author page

Wolter J. Fabrycky is Lawrence Professor Emeritus of Industrial and Systems Engineering at Virginia Tech and Chairman, Academic Applications International, Inc. He is a registered Professional Engineer in Arkansas (1960) and Virginia (1965). He received a Ph.D. in Engineering, Oklahoma State University (1962); M.S. in Industrial Engineering, University of Arkansas (1958); B.S. in Industrial Engineering, Wichita State University (1957). He taught at Arkansas (1957-60) and Oklahoma State (1962-65) and then joined Virginia Tech in 1965. Served as Founding Chairman of Systems Engineering, Associate Dean of Engineering, and then as University Dean of Research over a period of 12 years. He received the Lohmann Medal from Oklahoma State for Outstanding Contributions to ISE Education and Research (1992) and the Armitage Medal for Outstanding Contributions to Logistics Engineering Literature (2004); the Holtzman Distinguished Educator Award from the Institute of Industrial Engineers (1990); both the Grant and Wellington Awards from ASEE and IIE; and the Pioneer Award from the International Council on Systems Engineering (2000). He is Founder (2005) and President of the Omega Alpha Association: the Systems Engineering Honor Society and was President of Alpha Pi Mu: the Industrial Engineering Honor Society (2010-12). He is a Fellow of the American Association for the Advancement of Science (1980), the American Society for Engineering Education (2007), the Institute of Industrial Engineers (1978), and the International Council on Systems Engineering (1999). He has served or is serving on the Boards of ABET, APM, ASEE, IIE, INCOSE, and OAA. He is co-author of six Prentice Hall textbooks and Editor of the Pearson Prentice Hall International Series in Industrial and Systems Engineering.

visit author page

Download Paper |


An Abstract for ASEE EED 2016


From its modest beginnings a half-century ago, systems engineering is emerging as an effective technologically-based interdisciplinary process for bringing systems and their products into being. While the primary focus is nominally on the entities themselves, systems engineering is inherently oriented to considering “the end the before the beginning” and concentrates on what the entities are intended to do before determining what the entities are, with form following function.

System design is the prime mover behind systems engineering, with system design evaluation being its compass. System design requires integration and iteration, invoking a process that embraces and coordinates synthesis, analysis, and evaluation over the system life cycle. Systems analysis alone is not sufficient for the evaluation of synthesized system designs. It is the unique analysis capability of Engineering Economy enabled at the system level that is needed to support an effective systems engineering process.

The commitment to technology, configuration, performance, and life-cycle cost is particularly acute during the early stages of system design. A large gap exists between commitment and system-specific knowledge during conceptual and preliminary design. That gap may be reduced by indirect experimentation employing Engineering Economy (EE), Operations Research (OR), and Management Science (MS) at the system level. At stake is the future condition of the human-modified world to serve humanity.

A system Design Evaluation Function (DEF), linked to a multi-criteria Design Evaluation Display (DED), and embedded within a ten-block System Design Morphology (SDM) is offered for bringing engineering economic analysis to the system level. Design-Dependent Parameters (DDP’s) such as reliability, maintainability, producibility, supportability, sustainability, and others constitute the design space for mutually exclusive system design alternatives, with functionality included as part of the design evaluation display.

The mathematics behind the DEF is traceable to Churchman, Ackoff, and Arnoff (Introduction to OR, 1957), Fabrycky (Multisource Doctoral Dissertation, 1962), Fabrycky, Ghare, and Torgersen (Applied ORMS, 1984), and Blanchard and Fabrycky (Systems Engineering and Analysis, 2011). It is mapping of the DEF that partitions the system life-cycle into Design and Operations, making possible the employment of models from EE and ORMS from the very beginning of the system life-cycle. Money flow modeling and optimization together are shown to be essential for evaluation of each system design alternative, based on an expanded concept of equivalence.

This paper suggests that Engineering Economy should serve in a leadership position at the system level by providing systems analysis and evaluation as the system design progresses. A unique design evaluation function embracing a design-dependent parameter paradigm, a ten-block system design morphology, and a design decision display are advances offered toward that end.

Fabrycky, W. J. (2016, June), Engineering Economy at the System Level Paper presented at 2016 ASEE Annual Conference & Exposition, New Orleans, Louisiana. 10.18260/p.26640

ASEE holds the copyright on this document. It may be read by the public free of charge. Authors may archive their work on personal websites or in institutional repositories with the following citation: © 2016 American Society for Engineering Education. Other scholars may excerpt or quote from these materials with the same citation. When excerpting or quoting from Conference Proceedings, authors should, in addition to noting the ASEE copyright, list all the original authors and their institutions and name the host city of the conference. - Last updated April 1, 2015