Chapter - 1 - Introduction To Eng Economy

Engineering Economy
Sullivian
W.G,Wicks
E.Mand
Koelling
C.P(2012)
Mohamad
Sirin,R
(2007)
Blank,L.T,A.Tarquin(2012)
Engineering Economy, Fifteenth Edition
By William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling
Copyright 2012 by Pearson Education, Inc.

Upper Saddle River, New Jersey 07458
All rights reserved.
Chapter 1
Introduction to
Engineering Economy
12

Engineering economy
involves the systematic
evaluation of the economic
merits of proposed solutions to
engineering problems.


Why Engineering Economy is

Important to Engineers
Engineers design and create design & buildwhat
type of design involved?
Designing involves economic decisionssize min or
max? A=125m2, provide 4Y20 (Area 130m2 not 4Y25
(Area = 135m2
Engineers must be able to incorporate economic
analysis into their creative efforts Project A, but 20
company submit tender for this project..
14

Why Engineering Economy is

Important to Engineers
Often engineers must select and implement from
multiple alternatives..apa akan terjadi apabila 1 pile
patah semasa kerja piling dilakukan?
Understanding and applying time value of money,
economic equivalence, and cost estimation are vital
for engineers
A proper economic analysis for selection and
execution is a fundamental task of engineering.. 1 of
company submit 3 tender, which are 3BQ...which one
the best price??
15

Engineering economic analysis can

play a role in many types of
Choosing the best situations.
design for a high-efficiency gas
furnace.
Selecting the most suitable robot for a welding operation
on an automotive assembly line.
Making a recommendation about whether jet airplanes for
an overnight delivery service should be purchased or
leased.
Determining the optimal staffing plan for a computer help
desk.
Determing labour pekerja asing or tempatan
Progress Report..Interim payment, S-Curve
Bidding (BQ)the best price to select contractor
Hire purchase..machineries


SEVEN (7) fundamental principles

of engineering economy.
Develop the alternatives
carefully define the problem, then the choice (decision)
is among alternatives. The alternatives need to be
identified and then defined for subsequent analysis.
Focus on the differences
only the differences in expected future outcomes
among the alternatives are relevant to their comparison
and should be considered in the decision.


ContSEVEN (7) fundamental

principles of engineering economy.
Use a consistent viewpoint
the prospective outcomes of the alternatives, economic
and other, should be consistently developed from a
defined viewpoint (perspective)
Use a common unit of measure
using a common unit of measurement to enumerate as
many of the prospective outcomes as possible will
simplify the analysis of the alternatives.



Consider all relevant criteria
selection of a preferred alternative (decision making)
requires the use of a criterion (or several criteria). The
decision process should consider both the outcomes
enumerated in the monetary unit and those expressed in
some other unit of measurement or made explicit in a
descriptive manner.
Make uncertainty explicit
risk and uncertainty are inherent in estimating the future
outcomes of the alternatives and should be recognized in
their analysis and comparison.



Revisit your decisions
improved decision making results from an adaptive
process; to the extent practicable, the initial projected
outcomes of the selected alternative should be
subsequently compared with actual results achieved.


No
1
Principle of eng.
economy
Example issue
Develop the alternatives

carefully define the problem,
then the choice (decision) is
among alternatives
SMART Tunnel
Problem
1.Sinkholes
2. Crack
Propose all decision alternative

1.Service & Repair for maintenances purpose only, (xperlu
redesign)
2.Redesign, sampling & lab testing for others action approval
from authorities
3.New improvement technologist action


No
2
Principle of eng.
economy
Example issue
Focus on the differences

only the differences in
expected future outcomes
among the alternatives are
relevant to their comparison
and should be considered in
the decision.
Choose expected decision alternative (2) & (3)

2. Redesign, sampling & lab testing for others action approval
from authorities
Use a consistent viewpoint

the prospective outcomes of
the alternatives, economic and
other, should be consistently
developed from a defined
viewpoint (perspective)
2. Redesign, sampling & lab testing for others action

approval from authorities
a. melibatkan masa untuk merekabentuk & menyiapkn
laporan serta mendapatkan kelulusan oleh pihak
berkuasa tempatan.
b. melibatkan kos dan pekerja mahir bagi membuat
penyelenggaraan
3. New improvement technologist
3. New improvement technologist

a. menggunakan TB Machine jenis Variable Density
bukan jenis Earth Pressure Balance for different soil
condition.
b. menggunakan pekerja mahir yang dilatih khas
c. menggunakan bahan yang mempunyai kekuatan
tinggi


No
4
Principle of eng. economy
Example issue
Use a common unit of measure

using a common unit of measurement to
enumerate as many of the prospective
outcomes as possible will simplify the
analysis of the alternatives.
2. Redesign, sampling & lab testing

R/Bentuk semula & kelulusan ambil masa yang lama
Kos yang tinggi
pekerja mahir yang terlatih
3. New technologist to prevent Crack Steel
fibre
Constructive:
Less material cost
Labor reduction
Less human error
Structural:
Smaller crack width openings
Higher durability
Higher impact and abrasion resistance
Higher fatigue strength
Improved fire resistance properties
Consider all relevant criteria

selection of a preferred alternative
(decision making) requires the use of a
criterion (or several criteria). The decision
process should consider both the
outcomes enumerated in the monetary
unit and those expressed in some other
unit of measurement or made explicit in a
descriptive manner.
Review again all criteria

No
6
Principle of eng.
economy
Example issue
Make uncertainty explicit

risk and uncertainty are
inherent in estimating the
future outcomes of the
alternatives and should be
recognized in their analysis
and comparison.
Advantages
Minimized cracking and spalling
Less repair and maintenance needed
Better aesthetical appearance of the tunnel
No limitations for M&E to drill
Higher durability
Disadvantages
The use of SFRC as tunnel lining is uncommon
Unlike conventional rebar design, SFRC mix design is more
complex.
No precedence of mix design to follow
Limited guidelines on the sampling and testing of SFRC
samples
Engage experienced consultants to facilitate:
Revisit your decisions

improved decision making
results from an adaptive
process; to the extent
practicable, the initial
projected outcomes of the
selected alternative should be
subsequently compared with
actual results achieved.
Choose the best decision ..no (3)


Engineering Economy
Engineering Economy involves
Formulating .. v=P x L x t
Estimating, ..slab
Evaluating how many mixer lorry want to order???
expected economic outcomes of alternatives
designed to accomplish a defined purpose
Easy-to-use math techniques simplify the evaluation, ex :
Teorem Pithagoras
Estimates of economic outcomes can be deterministic or
stochastic in nature.ex : Progress Curve (S-curve)
115

Electronic spreadsheets are a

powerful addition to the
analysis arsenal.
Most engineering economy problems can be formulated
and solved using a spreadsheet.
Large problems can be quickly solved.
Proper formulation allows key parameters to be
changed.
Graphical output is easily generated.
Give example of spreadsheets that engineer use in
design for civil engineering???


General Steps for Decision Making

Processes
1.
2.
3.
4.
Understand the problem ..define objectives .. Ex :

broken pile
Collect relevant informationwhy that happen
(condong semasa setting piling work)
Define the set of feasible alternatives..discuss any
solution (korek semula? biarkan tanpa cukup bil pile
ikut size asal?redesign footing?)
Identify the criteria for decision making..list out
i.korek semula
ii. ikut saiz asal tanpa cukup bil pile
iii. redesign footing
117

Cont..General Steps for

Decision Making Processes
5.
6.
7.
Evaluate the alternatives and apply sensitivity

analysis..
i.korek semulaakan mengganggu struktur tnh
ii. ikut saiz asal tanpa cukup bil pilex boleh tanggung
load structure..
iii. redesign footingboleh tanggung load structure
Select the best alternative..choose (iii) redesign
Implement the alternative and monitor results....action
(submit drawing for aprovals)
118

Cont..General Steps for

No
Decision Making
Processes
Example issue
Understand the problem

(define objectives )
broken pile
condong semasa setting piling work
Define the set of feasible

alternatives..discuss any
solution
Senaraikan semua kebarangkalian solution..korek

semula? biarkan tanpa cukup bil pile ikut size
asal? redesign footing etc.
Identify the criteria for decision

making..list out
i.korek semula
ii. ikut saiz asal tanpa cukup bil pile
iii. redesign footing
Evaluate the alternatives and

apply sensitivity analysis..
i.korek semulaakan mengganggu struktur tnh

ii. ikut saiz asal tanpa cukup bil piletidak
boleh tanggung load structure..
iii. redesign footingboleh tanggung load
structure
Select the best alternative..

choose
(iii) redesign
Implement the alternative and

submit drawing for approvals
monitor results.. action
119

Steps in an Engineering
Economy Study
120

Take Home Quiz 1

1.Find one (1) problem economic
issues related on
building/construction/environment/
structure/materials/road & drainage/
others activities.
2. Solve the problem follows the
i. Principle of eng economy
ii. Decision making process.



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Engineering Economy

Copyright 2012 by Pearson Education, Inc.

Copyright 2012 by Pearson Education, Inc.

Engineering Economy, Fifteenth Edition

Copyright 2012 by Pearson Education, Inc.

Why Engineering Economy is

Copyright 2012 by Pearson Education, Inc.

Why Engineering Economy is

Copyright 2012 by Pearson Education, Inc.

Engineering economic analysis can

Engineering Economy, Fifteenth Edition

Copyright 2012 by Pearson Education, Inc.

SEVEN (7) fundamental principles

Engineering Economy, Fifteenth Edition

Copyright 2012 by Pearson Education, Inc.

ContSEVEN (7) fundamental

Engineering Economy, Fifteenth Edition

Copyright 2012 by Pearson Education, Inc.

ContSEVEN (7) fundamental

Engineering Economy, Fifteenth Edition

Copyright 2012 by Pearson Education, Inc.

ContSEVEN (7) fundamental

Engineering Economy, Fifteenth Edition

Copyright 2012 by Pearson Education, Inc.

Develop the alternatives

Propose all decision alternative

Engineering Economy, Fifteenth Edition

Copyright 2012 by Pearson Education, Inc.

Focus on the differences

Choose expected decision alternative (2) & (3)

Use a consistent viewpoint

2. Redesign, sampling & lab testing for others action

3. New improvement technologist

3. New improvement technologist

Engineering Economy, Fifteenth Edition

Copyright 2012 by Pearson Education, Inc.

Principle of eng. economy

Use a common unit of measure

2. Redesign, sampling & lab testing

Consider all relevant criteria

Review again all criteria

Copyright 2012 by Pearson Education, Inc.

Make uncertainty explicit

Revisit your decisions

Choose the best decision ..no (3)

Engineering Economy, Fifteenth Edition

Copyright 2012 by Pearson Education, Inc.

Copyright 2012 by Pearson Education, Inc.

Electronic spreadsheets are a

Engineering Economy, Fifteenth Edition

Copyright 2012 by Pearson Education, Inc.

General Steps for Decision Making

Understand the problem ..define objectives .. Ex :

Copyright 2012 by Pearson Education, Inc.

Cont..General Steps for

Evaluate the alternatives and apply sensitivity

Copyright 2012 by Pearson Education, Inc.

Cont..General Steps for

Understand the problem

Decision Making Processes

condong semasa setting piling work

Define the set of feasible

Senaraikan semua kebarangkalian solution..korek