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Is It Time For A New Paradigm?

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Conference

2005 Annual Conference

Location

Portland, Oregon

Publication Date

June 12, 2005

Start Date

June 12, 2005

End Date

June 15, 2005

ISSN

2153-5965

Conference Session

What's New in Engineering Economy

Page Count

7

Page Numbers

10.843.1 - 10.843.7

Permanent URL

https://peer.asee.org/15186

Download Count

117

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Paper Authors

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Rafael Landaeta

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Bryan Magary

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William Peterson

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Abstract
NOTE: The first page of text has been automatically extracted and included below in lieu of an abstract

Session 2639

Is It Time For A New Paradigm?

William R. Peterson, Rafael E. Landaeta, Bryan Magary

Old Dominion University

Abstract

This paper asks the question: should we drastically change the way we teach undergraduate engineering economic? With the widespread availability of spreadsheet software should we rethink the presentation of the material and concentrate on the creation of the cash flow and less on the mechanics of converting the cash flow into a decision variable? The pro’s and con’s of each option are discussed. This paper is intended to provoke a dialog not recommend a course of action.

Background Engineering Economics traces its beginnings back to Arthur M. Wellington and his 1887 work, The Economic Theory of Railroad Location. In the intervening 108 years the discipline has grown into a well accepted body of knowledge to which incremental improvements are being constantly added.

In 1887, the slide rule was the still the standard computational support tool (as it had been since late in the 17th century. In the intervening years the electronic calculator and the computer have displaced the slide rule (although undergraduate engineering students in the late 1960s were still using the slide rule as the standard computational support tool). In 2005 the student is armed with at least a powerful calculator capable of storing equations and solving a wide variety of involved equations. It is not uncommon for students to quickly program their high-end engineering calculators to provide the table values in lieu of looking up the values and to write simple equations to solve for IRR and other standard application types. Additionally, the student is now (or we argue soon will be universally) equipped with a personal laptop computer with a standard business package to include spreadsheet software (typically Excel® or Quattro-Pro®).

Based on the slide rule (and continued when the first calculators appeared – four functions, add, subtract, multiply, divide), the use of tables for the various common functions used in engineering economic calculations (F/P, P/F, P/A, A/P, P/G, A/G) rapidly became the norm. This use of tables allowed the values to be calculated once (and hopefully insured that the correct value was found through a rather tedious and laborious manual calculation until the computer was available).

“Proceedings of the 2005 American Society for Engineering Education Annual Conference and Exposition Copyright © 2005, American Society for Engineering Education”

Landaeta, R., & Magary, B., & Peterson, W. (2005, June), Is It Time For A New Paradigm? Paper presented at 2005 Annual Conference, Portland, Oregon. https://peer.asee.org/15186

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