Engineering economy

It plans to choose the most suitable one among alternative possibilities. We make this choice using
the economic efficiency measures of the enterprises.

Economic efficiency measures:

1. Productivity

Productivity = output / input

Partial Productivity:

Labor productivity = output / worker hours

Raw material productivity = output / amount of raw materials used

Machine productivity = output / machine time

For many of the factors used as inputs, individual productivity can be looked at.

2. Economics

Economics = monetary value of outputs / monetary value of inputs

3. Rationality / profitability

Profitability = net profit / total capital

Note = is not decided by once-achieved event criteria.

Example: A casting can cast 4.6 tonnes of ductile iron using 5 tonnes of iron logs and 350 kg of
magnesium. The price of iron is 1.5 TL / kg and the price of magnesium is 2.38 TL / kg. In this process,
energy of 1750 TL is used. 400 TL for labor and 250 TL for other expenses. The foundry's kilogram was
sold at 3.65TL. What is the productivity and economics of this casting?

Example: A worker in x machine company 3 CNC can work for 8 hours to produce 1200 pieces or 424
pieces. What is the productivity of this worker?

• Here, efficiency and B are calculated separately. Because the question is that we can produce A or
B parts in 8 hours.
Example: X food operation has entered the fattening project of 1800000TL. And at the end of the
year, net income reached 2268000 TL. What was the productivity of this investment.

Example: Hasan is able to read an average of 15 pages of textbooks per hour, and the average
number of pages he can read per day is 75 pages. What is Hasan's productivity?

Average is given in the question. Hourly and daily productivity is calculated separately. 15 hours /
page, and the daily productivity should be 75 pages / day.

Example: Selçuklu Hospital treated 3185 patients in October. He earned 368,000 TL income including
surgery and hospital services. Hospital expenditures totaled TL 425912. What is the productivity of
the hospital as a day and the economics of October?

• When calculating productivity for October, the planting month is evaluated over 31 days.

0.864 <1 The hospital is in detriment in October.

Example: Hasköy Dairy produces milk and dairy products by processing 40 tons of milk per day. The
company plans to produce and sell 2,000 tons of cheese for this season. The selling price of cigarette
kg is TL. An average of 6 kg of milk produced 1 kg of cheese. The wholesale price of cheese is 5 TL /
kg.

This year the herbs became more juicy due to the rains. For this reason, a kilo of cheese has to be
produced from 6.450 kg milk. In this case;

a) What is the amount of milk the company should use for this season?

b) What is the rate of deviation of milk yield?

c) What is the economy of cheese production?

a) There is no mention in the question of any change in the company's cheese production.

If 1 kg of cheese = 6,450 kg of milk is produced,

2000 tons of cheese = 2000 * 6,450 * 1000 = 12900000 kg milk

• We busted to 1000 tonnes to translate to 1000 kg of cheese.

b) The deviation is found by subtracting the efficiency of the first production from the efficiency of
the second production.

So there is a reduced productivity of 7.5%. Cost is said to have increased in this ratio.

c) ...

That is, 147.65% economics is provided. If 1 TL is invested in this system, 1.4765 TL income will be
obtained.

Example: A steel casting company produces tractors and combine harvesters. Casting system works
with 92% productivity and this ratio is considered as optimal. In January, 300 tons were cast and 265
tons of T-64-3C steel were obtained. The tonnage of the material used in the casting is 1675 TL. The
sales price of 1 kg casting is 2,875 TL. Expenditure engineering has voiced that there is no optimality
in the casting of this month and that there is a pervert. This topic has been given to you for your
review. In this issue we will prepare the numerical data of the report you will prepare.

• Raporda tries to measure economic activities that can be measured with the information given for
the question.

• Firstly, the new productivity is calculated as it is said to be deviating from the productive:

• Once the new productivity has been calculated, the deviation from the old productive should be
calculated:

Loss of Productivity = 0.92-0.8833 = 0.0367

• Then the amount of loss in production is analyzed according to the old

Loss in production = 300 * 0.0367 = 11.01 tons

• Cost of production loss can be calculated

Amount = 11,01 * 1675 = 18441,75TL

• Calculating the January economic gain

economics =
COSTS

1. COSTS ACCORDING TO PRODUCTION STEPS

A) DIRECT WORKING AND MATERIAL EXPENSES

The cost of materials directly involved in the product to be produced and measured in terms of unit
usage is called direct material cost. The wage paid to workers directly participating in the production
process of the product to be produced and the wage paid to the insurance costs are directly related
to labor costs

B) GENERAL MANUFACTURING EXPENSES

Materials that can not be quantified per unit in production, and labor that can not be charged per
unit, energy used in production, depreciation, taxes, rent etc.

C) NON PRODUCTION COSTS

It is the cost that determines the product sales price and is not related to the production activity.

• GENERAL ADMINISTRATIVE COST: It includes all management, organization and office costs related
to business management.

• SALES COSTS: product storage, distribution, advertising expenditure, sales commissions, etc. during
the marketing of the product. costs.

2. COSTS FOR LAND TRANSITION ANALYSIS (SHORT TERM COSTS)

• Fixed costs: it is called "folding" regardless of the amount of production produced. The rent paid for
the enterprise, the salary paid to the workers, etc.

• Variable costs: costs that vary depending on the amount of production. For example, money paid
for raw materials

• Total cost: refers to the sum of variable and fixed cost.

* Average costs: refers to the amount of cost per unit. It is found by dividing the total cost by the
production amount.

a) Average fixed cost: the amount of fixed cost per unit. Fixed cost is found by dividing by production
amount.

b) Average variable cost: The variable cost per unit is the amount of cost. Variable cost is found by
dividing by production amount.

• Marginal cost: the increase in the unit production amount is used to calculate the financial effect.

3. Costs Related to Decision Making

•Opportunity cost

• Add-on Cost

• Ship Cost