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ALI SALMAN
alisalman@
DEPARTMENT ceme.nust.edu.pk
DEPARTMENT
OF
OF
ENGINEERING
ENGINEERING MANAGEMENT
MANAGEMENT
NUST,
NUST,COLLEGE
COLLEGEOF
OFEE&&ME
ME
ALI SALMAN 1
Why Study Engineering
Economics?
2
Why Study Engineering Economics?
3
On top of that many engineers are expected to
establish their own firms. In this scenario, they need
to acquire broad knowledge to run their companies
effectively and efficiently.
4
For example, a child tricycle could be built with an
aluminum frame or a composite frame.
5
Engineering
7
Resources
Capital Resources
10
Engineering Economy
11
Role in Capital Investment Decisions
13
Examples of Capital Investment Decisions
for Engineering Activities:
14
Should a highway bypass be constructed around a city
of 25,000 people?
15
Bi Enviromental Nature of Engineering
Physical Environment :
Engineers produce products and services depending on
physical laws (e.g. Newton's laws).
Economic Environment :
Much less of a quantitative nature is known about
economic environments -- this is due to economics being
involved with the actions of people, and the structure of
organizations.
16
Satisfaction of the physical and economic environments
is linked through production and construction
processes.
17
Figure 1.1 : Physical and Economic Components of an Engineering System
Social Sciences
19
Economy
1. The system of production, distribution and
consumption
2. The efficient use of resources