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Novel Visual Algorithm to Teach Benefit-cost Ratio Analysis

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Conference

2015 ASEE Annual Conference & Exposition

Location

Seattle, Washington

Publication Date

June 14, 2015

Start Date

June 14, 2015

End Date

June 17, 2015

ISBN

978-0-692-50180-1

ISSN

2153-5965

Conference Session

Engineering Economics New Frontiers

Tagged Division

Engineering Economy

Page Count

11

Page Numbers

26.1193.1 - 26.1193.11

DOI

10.18260/p.24530

Permanent URL

https://peer.asee.org/24530

Download Count

175

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Paper Authors

biography

Hector E. Medina Liberty University

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Dr. Medina is an Assistant Professor of Mechanical Engineering at Liberty University (Lynchburg, Va.). He obtained a B.Sc. in Engineering from the Colorado School of Mines, and both an M.Sc. and Ph.D. in Mechanical and Nuclear Engineering from the Virginia Commonwealth University. Prior to graduate school, he worked in industry and as a high school teacher for several years, in his native Venezuela and Aruba. Since 2012, he has published about a dozen articles in peer-review journals and conference proceedings. Journals include Applied Mechanics Reviews, Polymer, and International Journal of Solids and Structures. He has also presented at both national and international podiums and won several awards such as the best student paper award and best student poster awards at the International Conference of Nuclear Engineering ICONE20 and ICONE21, respectively.

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biography

Kyle Michael Ceffaratti Liberty University

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Kyle Ceffaratti is a second year student pursuing a degree in Industrial and Systems Engineering at Liberty University. Supply Chain Management and ERP implementation are two of his preferred topics of study. His research interests are in developing teaching methods that will improve comprehension and memory retention.

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Abstract

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

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