June 14, 2015
June 14, 2015
June 17, 2015
26.1193.1 - 26.1193.11
NOVEL VISUAL ALGORITHM TO TEACH BENEFIT-COST RATIO ANALYSIS By Hector Medina, PhD Kyle CeffarattiIt is well known that the benefit-cost ratio (BCR) analysis is the most used approach for economicanalysis and decision making in the public sector. The most important reason for this, perhaps, is relatedto the simplicity of BCR analysis. However, often times, freshmen and sophomore students findtraditional incremental-analysis algorithms long and tedious, mostly when dealing with four or morealternatives. Moreover, even those who appear to grasp the steps more easily tend to forget them inthe immediate following term. A new, easy-to-understand algorithm could facilitate theteaching/learning experience of BCR analysis, while improving the level of retention over time. It hasbeen established that visual approaches can help accomplish both of the aforementioned goals. Withthis intention in mind, we have derived a novel, simple, and purely-visual algorithm to select the best ofmany alternatives using the BCR analysis, with the advantage of avoiding the route of traditionalincremental analysis. In our approach, BCR values for all alternatives are plotted on a 2-dimensional, 3-axis diagram: two parallel and one perpendicular coordinates. The best alternative is selected by themaximum vertical or perpendicular distance from the points to the incline BCR=1. The proposedalgorithm has been preferred by our Engineering Economic Analysis students.
Medina, H. E., & Ceffaratti, K. M. (2015, June), Novel Visual Algorithm to Teach Benefit-cost Ratio Analysis Paper presented at 2015 ASEE Annual Conference & Exposition, Seattle, Washington. 10.18260/p.24530
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: © 2015 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