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Interactive Simulation For Teaching Engineering Economics

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2002 Annual Conference


Montreal, Canada

Publication Date

June 16, 2002

Start Date

June 16, 2002

End Date

June 19, 2002



Conference Session

Engineering Economy Classroom Tips

Page Count


Page Numbers

7.722.1 - 7.722.7



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Paper Authors

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Kevin Dahm

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Session 1339

Interactive Simulation for Teaching Engineering Economics

Kevin Dahm Rowan University, Glassboro, NJ


A game that simulates the economic decision-making that occurs in running a company has been developed and integrated, as a semester-long project, into a senior/graduate course on engineering economics. The game challenges students to not only learn engineering economic principles such as present worth, rate of return etc., but also to use them to make realistic economic decisions in a competitive setting. This creates a fun, engaging environment for active learning of the material and provides a framework that illustrates the importance of the material. In the game, each student starts with an identical sum of money, and is presented with a list of investment opportunities. Students apply the principles learned in class to the possible investments and make decisions such as how much to bid on a particular mine or factory in an auction. Additional investment opportunities are introduced weekly throughout the semester, with the required analysis growing in complexity as the students’ knowledge base increases. The game is interactive in nature- for example; the owner of a factory must negotiate the price of raw materials he/she needs with the owner of a mine. Student response to the exercise was extremely positive; they found it both enjoyable and beneficial.


Recent texts on engineering economics1-4 all stress that the practical purpose of engineering economics is that it empowers the engineer to make sound investment decisions. End of chapter homework problems in these texts can be broadly placed to two categories: strictly computational problems, such as “calculate the rate of return of this cash flow diagram,” and questions such as “should the equipment be replaced or not?” that ask the student to make a practical decision. The inclusion of some problems from the latter category is crucial both because they provide the more thorough test of the student’s understanding of the material, and because they underscore the practical value of the material.

This paper describes a game that simulates practical economic decision-making. Students started the semester with $10,000 and “ran their company” for the semester, applying the principles learned in class to a series of investment possibilities presented by the instructor. The game thus filled the role of the traditional “decision” homework problems, but had some additional goals and benefits:

Proceedings of the 2002 American Society for Engineering Education Annual Conference & Exposition Copyright Ó 2002, American Society for Engineering Education

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Dahm, K. (2002, June), Interactive Simulation For Teaching Engineering Economics Paper presented at 2002 Annual Conference, Montreal, Canada. 10.18260/1-2--10975

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