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Session: 1139

The Role of Engineering Economics in the Chemical Engineering Curriculum

Michael L. Mavrovouniotis Chemical Engineering Department , Northwestern University, Evanston, IL 60208

Abstract Engineering economics is an integral part of the senior design course in all Chemical Engineering curricula. The main topics normally covered include cost estimation (focused on chemical process equipment), the time value of money, and profitability measures. This paper offers a commentary on the importance and future role of engineering economics. Many topics of engineering economics display the engineering problem-solving approach at its best, in a manner that is shared by all engineering disciplines. For example, the hierarchy of cost estimation techniques is typical of methods used in other quantitative engineering problems. In cost estimation, one must learn to devote the extra effort required for more accurate estimates only in those cases where the accuracy will ultimate matter. Most unprofitable alternatives should be screened out using only very coarse and quick cost estimates. A likely change as engineering curricula become more practice-oriented is a move of economy material from the senior level to the first or second-year level. The earlier exposure to engineering economics will allow economic studies to be integrated into many intermediate-level courses with engineering design elements.

INTRODUCTION engineer makes a multitude of choices in process configurations, units, and materials, and economic In most undergraduate Chemical Engineering factors are central in these decisions (Hazelberg, curricula, engineering economics is covered in the 1994). Economic considerations likewise guide the senior-level capstone design course which is operation of an existing process. project-based and involves the design of a chemical plant. The early modules of the course include Very often, these choices are guided by rules of (Peters and Timmerhaus, 1991, Woods, 1994) the thumb (Douglas, 1988) which summarize past estimation of capital and operating costs, time value experience, but the engineer must still contend with of money, and profitability analysis, so that the frequent exceptions and with choices not covered economics of various design options can be by such rules. Thus, the quantitative understanding compared as the project is carried out. The topics of economic implications in the design and of depreciation and taxes receive only brief operation of a process is indispensable. coverage. Cost estimation is geared towards chemical process equipment, with most ancillary Engineering economics is among the course topics costs lumped into simple factors. most likely to be used directly by students after graduation. It is sufficiently generic to be valuable How important is engineering economics for the in a large variety of chemical engineering jobs. It Chemical Engineering curriculum? In what ways is also quite realistic (at least in some of its topics, does it enhance engineering problem-solving skills? such as the time value of money) so that the What likely changes in the structure of the barriers between the course material and a practical curriculum will involve engineering economics, and application confronting a new engineer are quite what are their consequences? This paper offers the low. author’s view on these important questions. This set of direct benefits of engineering economy is sufficient to earn it a permanent role in the IMPORTANCE OF ENGINEERING chemical engineering curriculum. Beyond these ECONOMICS primary effects, engineering economy also has two The primary role of engineering economics is the indirect (yet, in the author’s opinion, quite same in all engineering disciplines: It guides important) beneficial effects, discussed in the next decision making. In the design of a process, the section.

$!&’ ‘J31Jly F 1996 ASEE Annual Conference Proceedings .

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Mavrovouniotis, M. L. (1996, June), The Role Of Engineering Economics In The Chemical Engineering Curriculum Paper presented at 1996 Annual Conference, Washington, District of Columbia. 10.18260/1-2--6272