,.

L-4/T-2/CHE Date: 15/07/2017

BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-4/T-2 B. Sc. Engineering Examinations 2015-2016

Sub: eRE 411 (Economics and Management of Chemical Process Industry)

Full Marks: 280 Time: 3 Hours

USE SEP ARA TE SCRIPTS FOR EACH SECTION
The figures in the margin indicate full marks.

SECTION -A
There are FOUR questions in this section. Answer Q. NO.1 and any TWO from the rest.
Question NO.1 is COMPULSORY.

1. Select the correct answer and provide concise reason(s) for your choice. If you do not

provide explanation you will only get 40% marks. (10x5=50)

(i) At what level of an organization does a corporate manager operate?
(a) Functional
(b) Operational .
(c) Middle level
(d) Top level
(ii) In what order do managers typically perform the managerial functions?
(a) organizing, planning, controlling, leading
(b) organizing, leading, planning, controlling
(c) planning, organizing, leading, controlling
(d) planning, organizing, controlling, leading
(iii) Process of management aims at
(a) Cooperating with a number of persons pursuing a goal
(b) Coordinating work of number of persons to achieve objectives
(c) Supervising a number of persons pursuing an objective
(d) None of the above
(iv) Guidelines for setting effective objectives
(a) Linkage to overall objective
(b) Attainable objectives
(c) Review of objectives
(d) All of the above
(v) Departmentation aiming at span of management, span of control or span of
supervision is based on
(a) Numbers
(b) Region or Area
(c) Functions
(d) None of the above

Contd P/2
 =.2=
CHE411
Contd ... Q. NO.1
(vi) The superior cannot assign duties to his subordinates unless he delegates .
to them.
(a) Responsibility
(b) Authority
(c) Liability
(d) None of the above
(vii) Canon sells its fax machine to consumer, business, and government markets. In this
case, where customers fall into different user groups, a organization is
desirable.
(a) matrix management
(b) geographic
(c) product (or brand) management
(d) market-management
(e) functional
(viii) The manager giv,es incentive for one employee on their extra effort on new project,
the power which used in this situation is -
(a) Coercive
(b) Reward
(c) Legitimate
(d) Expert
(ix) When we classify managers according to their level in the organization they are
described as .
(a) Functional, staff and line managers
(b) Top managers, middle managers and supervisors
(c) High level and low level managers
(d) General managers and administrative managers
(x) As a manager moves to higher positions in an organization the ability to make
............ becomes important.
(a) Non-programmed; more
(b) Programmed; more
(c) Non-programmed; less
(d) Programmed; much more
I

2. (a) What are the main features of a GOOD plan? Write an explanatory note on the

Types of Plans. (15)

(b) In Planning there are - Objectives, Goals and Indicators. Using a suitable example,

EXPLAIN these three terms. (15)

(c) What do you understand by Technology Transfer? Why is it difficult to have

effective Technology Transfer? (15)

Contd P/3
 =3=
CHE411
3. (a) Why information systems are so essential in business today? (8)
(b) Discuss and compare the following types of communications: mass communication,

inverses mass communication, and conference type communication. (12)

(c) Draw an organization chart showing at least 5 levels for a Bangladeshi health and

consumer products manufacturing company having the following features: (25)

(i) Operates in three regions of the country
(ii) Produces three different types of products
(iii) Develops new products through research and development
(iv) There are staff supports at the higher level
(v) Company regularly looks to reinvest profits in new ventures

4. (a) The following table shows the activities that needs to be undertaken to complete an
engineering project. Draw the Activity Diagram for the project. Calculate the early
time, late time and total float for each event, and identify the Critical Path of the given

project with the help of arrow network. (35)

Activity Symbol Estimated Time (week) Post Requisite
A 7 E
B 2 E
C 15 I
D 8 F
E 10 G,D
F 2 I
G 5 H,F
H 8
I 2 J
J 3

(b) Explain 'Theory X' and 'Theory Y' of organizing. (10)

SECTION-B
There are FOUR questions in this section. Answer any THREE.

5. (a) Derive the followings:

(i).For continuous compounding of a principal amount F = PerN (6)

11 Future wort h 0 f annmty

(") .. IS F = [(I+iti -1]
A (14)

(b) Suppose you are now 20 years old. You have decided to save Tk. A per year starting
on your twenty-first birthday and continuing through your sixtieth birthday. At age 60

you will have saved an accumulated (compounded) amount of Tk. F. (26%)

Contd P/4
 =4=
CHE411
Contd ... Q. No. 5(b)
A friend of yours waits five years to start his savings plan. Starting on his twenty-sixth
birthday, it takes annual payment of Tk. 2 A for him to accumulate Tk. F when he
becomes 60 years old. Calculate the annual interest rate.

6. (a) What are the difficulties of the IRR method and advantages of the IRR method and

advantages of ERR method over IRR method in project feasibility study. (16%)
(b) A small company purchased now for 25,000 will lose 1,200 each year for the first
four years. An additional $ 10,000 invested in the company at the end of fourth year will
result in a profit of $ 6,000 each year from the fifth year through the twelveth year. At the
end of twelve years the company can be sold for $ 30,000. MARR is 10%. Check the

acceptability of the company with ERR method. (30)

7. (a) Discuss the major sources of uncertainty that arises when we undertake economic

analysis of engineering projects. (18%)

(b) Name the non-probabilistic methodologies for dealing with uncertainty in engineering

economy studies. Describe few of them. (12)

(c) Two 1OO-horsepower motors are being considered for use (16)
ABC Brand XYZBrand
Purchase price $1,900 $ 6,200
Useful life in years 10 10
Salvage value None None
Annual maintenance cost $ 170 $310
Efficiency 80% 90%

Power cost is $ 0.10 per kWhr adn the interest rate is 12%. How many hours of operation
per year are required to justify the purchase ofXYZ brand motor? (1 hp = 0.746 kW).

8. (a) What are the advantages and disadvantages of using risk adjusted MARR and

Truncated useful life in sensitivity analysis of a project? (16%)

(b) A new steam flow monitoring device must be purchased immediately by a local
municipality. The following most likely (best) estimates have been developed by a group

of engineers: (30)
Capital investment $ 140,000
Annual savings $ 25,000
Useful life 12 years
Salvage value (end of year 12) $ 40,000
MARR 10%/year
Because considerable uncertainty surrounds these estimates, it is desired to evaluate the
sensitivity ofPW to:!: 50% changes in the most-likely estimates of (a) annual savings, (b)
useful life, and (c) interest rate (MARR). Plot the results and determine to which factor
the decision is most sensitive.
------------------------------------------------------
,

. .,of,t.
L-4/T-2/CHE Date: 14/0112017
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
LA/T-2 B. Sc. Engineering Examinations 2014-2015

Sub: eRE 411 (Economics and Management of Chemical Process Industries)

Full Marks: 280 Time: 3 Hours

The figures in the margin indicate full marks.
USE SEP ARA TE SCRIPTS FOR EACH SECTION

SECTION-A.
There are FOUR questions in this section. Answer any THREE.

1. (a) Each year, sector 'A' purchases $ 5 million of goods from sector 'B' and $ 10 million
from sector 'C'. Sector 'B' makes annual purchase of $ 2 million from sector 'A' and $ 8
million from sector 'C'. Annual purchase of sector 'C' are $ 3 million from sector 'A' and $
6 million from sector 'B'. Within-sector purchases are $ 1 million for sector 'A', $ 4
million for sector 'B', and $ 5 million for sector 'C'. Total sales in the sectors are $ 20
million, $ 20 million and $ 30 million, respectively.
(i) Write the transaction matrix for the three sectors, (10)
(ii) How much is value added for sector 'A'? (5)
(iii) How much is final demand in sector 'A'? (5)
(iv) Write the direct requirements matrix for the model. (10)
Also explain each component of the third column of the direct requirements matrix.
(b) The design of a special use structure, two mutually exclusive alternative are under

consideration. These alternatives areas follows: (167j)

D1 D2
.Capital Investment $ 50,000 $ 120,000
Annual expenses $ 9,000 $ 5,000
Usefullife(years) 20 50
Market value (at the end of useful life ) $ 10,000 $ 20,000

If perpetual service from the structure is assumed, which design alternative do you
recommend? The MARR is 10% per year. .

2. (a) As the supervisor of a facilities engineering department, you consider mobile cranes
to be critical equipment. The purchase of a new medium-sized, truck mounted crone is
being evaluated. The economic estimates for the two best alternatives are given below (30)
'A' 'B'
Capital Investment $ 272,000 $ 316,000
AIIDual expenses $ 28,800 $ 19,300
Useful life (years) 6 9
Market value (at the end of useful life) $ 25,000 $ 40,000

Contd P/2
 =2=
eRE 411
Contd ... Q. No. 2(a)

You have selected the longest useful life (9 years) for the study period and would lease a
crane for the final three years under alternative 'A'. Based on previous experience, the
estimated annual leasing cost at that time will be $ 36,000 per year. The MARR is 15%
per year. Show that the same selection is made based on
(i) the PW method and (ii) the ERR method.
(b) Using a 3x3x3 matrix explain the Optimistic-Most likely-Pessimistic Method for

dealing with uncertainity. (16 %)

3. (a) Suppose that the California Agricultural Department is considering a temporary
irrigation project to be used for the five years until a major irrigation project will he
ready. The direct and indirect costs and benefits of the temporary public project are those
given in the following table, and they are paid on received at the end of each year.
Determine whether the project should be undertaken if the social discount rate is (i) 6%
or (ii) 14%, by the conventional B-C ratio method. (iii) What is the effect of neglecting
the indirect costs and benefits of the project, if the social discount rate is 10%? (20)
Year Costs (in thousands ofTk.) Benefits (in thousands ofTk.)
Construction Maintenance Indirect Direct Indirect
0 260
1 100 30 160 40
2 100 30 160 40
3 100 30 160 40
4 100 30 160 40
5 100 30 160 40

(b) What is the role of Taxes and Insurance in projects? (10)

(c) To build up a sum ofTk. 10,00,000 at the end of 10 years, how much money must be
deposited every year (equal installment) if the nominal interest rate is 11% compounded

continuously? (16 %)
4. (a) A particular project, whose initial cost is Tk. 1,000,000 has the following cash flow: (18)
End of year Net cash flow (Tk)
1 -100,000
2 0
3 500,000
4 500,000
5 1,400,000

Calculate the IRR of the project showing all works.

Contd P/3
 =3=

CHE 411
Contd ... Q. NO.4

(b) Two electric motors are being considered to power an industrial hoist. Each is capable
of providing 90 hp. Pertinent data for each motor are as follows: (18)
Motor D-R Motor West house
Capital Investment $ 2,500 $ 3,200
Electrical efficiency 0.74 0.89
Yearly maintenance cost $ 40 $ 60
Useful life (years) 10 10

If the expected usage of the hoist is 500 hours per year, what would be the cost of
electrical energy (in cents per kilowatt-hour) before the D-R motor is favoured over the
West house motor? The MARR is 12% (Note: 1 hp = 0.746 kW).

(c) Explain the Capital Budgeting process with an example of your choice.

SECTION -B
There are FOUR questions in this section. Q. NO.5 is COMPULSORY.
Answer any TWO from the rest.

5. COMPULSORY: Select correct answer and give concise reason for your choice. (lOx5=50)
(i) What is the duty to act according to the authority that has been given?
A. Responsibility
B. Professionalism
C. Power
D. Delegation
(ii) Which of the following is not a good reason to set up staff departments?
A. To improve upward communication
B. To improve communication links for technical information
C. To make the best use of scarce specialist skills
D. Through rotation, to give trainee managers a range of experience
E. To enable line managers to focus on the main activities of the organization
(iii) According to the text, which of the following activities is better decentralized in the
typical organisation?
A. Setting conditions of employment
B. Information systems design
C. Controlling international cash flows
D. Purchasing capital equipment
E. Operations management
F. Management development
Contd P/4
 =4=

eRE 411
Contd ... Q. No.5

(iv) Which of the following was not given as a means to achieve co-ordination?
A. Rules and procedures
B. Line management
C. Liaison staff
D. Cross-functional teams
E. Information systems
(v) What are the three themes found in the choice of organizational divisions?
A. Hierarchy, level and chain of command
B. Growth, specialization and co-ordination
C. Products, customers and geography
D. Size, diversity and independence
E. None of the above options
(vi) Don MacKinnon, the person in charge of "Hear Music" has been given goals related
to the rollout and sales of this subsidiary of Staibucks. His success at implementing the
strategy will be assessed by comparing actual performance against the goals. This.
comparison is known as:
A. Planning
B. Organizing
C. Implementing
D. Controlling
(vii) Because GE is organized into different divisions, one for each business, it is .known
as a:
A. multidivisional enterprise
B. poorly managed firm
C. multi-business unit
D. multi-corporate concern
. (viii) When call center managers spend much of their time monitoring customer calls and
giving employees feedback about how to improve their dialogue with customers in the
future, these managers are using skills.
A. technical
B. conceptual
C. situatiqnal
D. ethical
(ix) Individuals such as Albert Einstein, Bill Gates and Steve Jobs lead through which
type of power?
A. Legitimate
B. Reward
C. Expert
D. Charismatic
Contd P/5
 •
•
.=5=

eRE 411
Contd ... Q. No.5

(x) Select the four decisional roles that the manager's informational roles typically lead to:
A. Entrepreneur
B. Disturbance handler
C. Spokesperson
D. Resource allocator
E. Negotiator

6. (a) What is a Technology S-curve? With the help of an example explain fully the concept. (15)
(b) In terms of technology distinguish between a "Developed" and an "Underdeveloped"
country. Your answer must include illustrations. (15)
(c) Discuss the barriers in Communication. (15)

7. (a) What is a MATRIX organisation? Explain fully how it functions and give a real life
example of such an organisation. (15)
(b) What are aspects of the changing environment under which a modem manager must
function? Briefly explain the challenges facing the modem manager in this respect. (15)
(c) Distinguish between 'Decision Making by Individuals' and 'Decision Making by .
Groups' by discussing the advantages and disadvantages of each type of decision making. (15)

8. The CEO ofa Chemical plant is planning to introduce a new product in the market. For
this purpose a project report is to be prepared. Activities involved in preparing such a
report are given below ( 45)
Activity Predecessor Time (days)
A - 6
B - 4
C A 3
D A 5
E A 1
F B,C 4
G B,C 2
H E,F 6
I E,F 5
J D,H 3
K G, I 5

(a) Draw a PERT and a CPM network, identify float times and the critical path for the project.
(b) Draw a Gantt chart from the above analysis.
(c) What is Dummy line? Did you have to use a Dummy activity while drawing the above
activity network? Give reason for your answer.
:'\'

L-4/T -2/CHE Date: 16/0112016

BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-4/T-2 B. Sc. Engineering Examinations 2013-2014

Sub: eRE 411 (Economics and Management of Chemical Process industries)

Full Marks: 280 Time: 3 Hours
The figures in the margin indicate full marks.
USE SEP ARA TE SCRIPTS FOR EACH SECTION

SECTION-A
There are FOUR questions in this Section. Answer any THREE.

1. (a) You purchased a building at Dhaka 10 years ago for $ 1,00,000. Its annual
maintenance expense has been $ 5,000 per year. At the end of fourth year, you spent $
10,000 for wall repairing activity. At the end of 10 years (Now), you sell the building for
$ 1,20,000. During the period of ownership, you rented the building for $ 10,000 per year
paid at the beginning of each year. Use the annual worth method to evaluate this

investment when the expected MARR is 13%. (16%)

(b) There are various brick kiln technologies in Bangladesh to produce clay fired bricks.
Among the technologies, Fixed chimney kiln (FCK) is the most adopted technology all
through Bangladesh due to its low initial cost and easy operability. However, yearly
average production of this kiln is around 4 million bricks each having a final weight of
2.7 kg (fired brick). For this 4 million brick production, annual labor cost is around
45,00,000 BDT, annual land rental value is 1,50,000 BDT, annual firing preparation and
maintenance cost is 8,00,000 BDT and annual staff salary is 6,00,000 BDT. FCK
consumes around 22 tonnes of coal to produce 1,00,000 bricks and the cost of coal is
6,000 BDT/ton of coal. Additionally, the brick manufacturer has to pay a VAT amount
3,85,000 BDT on A million bricks to the Government. The initial investment amount is
around 45,00,000 BDT. Salvage value of the FCK after 20 years is 4,00,000 BDT. Soil is
the essential raw material for brick production. FCK owners purchase 100 ft3 soil at a
price of 1,200 BDT which is used to produce 1,000 Bricks. Owners' MARR is 15%.

What is the production cost per kg of fired brick? (30)

2. (a) What are the non-probabilistic methodologies for dealing with uncertainty in

engineering economy studies? Explain their applicability in engineering economy study. (16%)

(b) Suppose that for an engineering project the optimistic, most likely and pessimistic

estimates are shown below. (30)

Estimation Conditions
Optimistic (0) Most likely (M) Pessimistic (P)
Capital Investment -$ 150,000 -$ 150,000 -$ 150,000
Useful life 19 years 10 years 7 years
Market value 0 0 0
Annual Revenue $ 120,000 $ 70,000 $ 40,000
Annual Expenses -$ 19,000 -$ 43,000 $ - 60,000
MARR 10% 10% 10%
Contd P/2
 =2=

eRE 411
Contd ... Q. No. 2(b)
It is thought that the most critical elements are annual revenue, annual expenses and
useful life. Develop a table showing the equivalent worth for all combinations of the
estimates for these three factors, assuming that all other factors remain at their most
likely values.

3. (a) What are the basic differences between privately owned and publicly owned projects?
What are the characteristics of Multiple-Purpose projects? Give an example in context of
Bangladesh and write down its characteristics. What are the possible conflicts among the

agencies of this multiple-purpose project? (16%)

(b) A governmental agency is considering four independent projects. The current budget.
for this agency allows not more that $ 35,000,000 to be spent in terms of initial
investment and the normal interest rate is 10%. Using the B/C ratio method, which of the

projects shown in the table below should be selected? (30)

Project Initial investment Annual cost Annual benefit Salvage value life
A $ 12,000,000 $ 1,250,000 $ 3,250,000 $ 750,000 30 years
B $ 20,000,000 $ 4,500,000 $ 8,000,000 $ 725,000 31 years
C $ 10,000,000 $ 750,000 $ 1,250,000 $0 30 years
D $ 14,000,000 $ 1,850,000 $ 4,050,000 $ 700,000 29 years

4. (a) What are ordinary annuity and annuity due? Explain the terms along with their uses in
engineering economy studies. Also develop the relationship between amount of annuity

due and the periodic payment.

(b) What are the sources of funds to an engineering firm for capital spending? "Capital
Asset Pricing Model is the best model in calculating cost of Equity Capital" - Justify
your answer through developing and explaining each of the terms associated with this
model.
(e) Develop a historical table for input-output analysis between two sectors in
engineering economy study and show the Direct Requirement Matrix of that input-output
model explaining each component of the development matrix.
(d) Write short notes on the following-
(i) Excise tax
(ii) Surtax
(iii) Carry-back and Carry-forward of losses
(iv) Attractive nuisance and Bailee's liability.

Contd P/3
 =3=

eRE 411
SECTION -B
There are FOUR questions in this Section. Answer THREE questions including Q. NO.5.

5. Compulsory Select correct answer and give concise reason for your choice (lOx5=50)
(i) ----------------------- is the process of getting activities completed efficiently and
effectively with and through other people
(a) Leading
(b) Management
(c) Supervision
(d) Controlling
(ii) ------------------- distinguishes a managerial position from a nonmanagerial one
(a) Manipulating others
(b) Concern for the law
(c) Increasing efficiency
(d) Coordinating and integrating others' work
(iii) The process of monitoring comparing and correcting is called
(a) Controlling
(b) Coordinating
(c) Leading
(d) Organizing
(iv) What are the three interpersonal roles of managers?
(a) Figurehead, leader and liaison
(b) Spokesperson, leader, coordinator
(c) Director, coordinator, disseminator
(d) Communicator, organizer, spokesperson
(v) The degree to which decision making is confined at a single point in an organization
is described as -------------------.
(a) Unity of command
(b) Chain of command
(c) Span of management
(d) Centralization
(vi) When Shumaila is comparing actual sales figures with goals established earlier to see
if her department met the target, she is performing which of the following functions?
(a) Planning
(b) Organizing
(c) Leading
(d) Controlling

Contd P/4
 =4=

eRE 411
Contd ... Q. No.5

(vii) Which of the following is a function of how much decision-making authority is

pushed down to lower levels in the organization?
(a) Departmentalization
(b) Centralization
(c) Span of control
(d) Power
(viii) In general, if a policy is not thought out an established
(a) a situation requiring action will arise
(b) social issues will cause change in the organization
(c) managers will be hired from the outside
(d) there will be significant staff turnover
(ix) Which of the management tasks is the most important for a supervisory manager?
(a) Planning
(b) Organizing
(c) Controlling
(d) Staffing
(x) Which of the following is a general statement or understanding that guide or
channelize thinking in decision making?
(a) Policy
(b) Procedure
(c) Rule
(d) Project

6. (a) Explain why "Technology Transfer" is difficult to achieve. (15)

(b) With the help of sketches, discuss different (at least 4) communication networks. (20)
(c) List five features of "Bureaucracy". (10)

7. (a) Draw an organogram of a company that (21)

- produces three products in two locations
- employs staff managers
-conducts research and development of new products

(d) Why are plans important? How many types of plans are there? (12)
(c) Discuss the interrelationships among MIS, DSS, EIS, and OAS systems. (12)

Contd P/5
.'

=5=

eRE 411
8. (a) The following table shows the activities that need to be undertaken to complete an
engineering project. Draw the Activity Diagram for the project. Calculate the early time,
late time and total float for each event, and identify the Critical Path of the given project

with the help of arrow network. (10+6+6+5+10=37)

Activity Symbol Estimated Time Post Requisite
(week)
A 6 B,C
B 8 D,F,H
C 10 D
D 8 E
E 10 J
F 8 G
G 8 J
H 4 I
I 8 J
J 10 K
K 4

(b) Explain the advantages and disadvantages of Gantt Chart. (8)

'.
L-4/T-2/CHE Date: 02/08/2015
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-4/T-2 B. Sc. Engineering Examinations 2012-2013

Sub: CHE 411 (Economics and Management of Chemical Process Industry)

Full Marks: 280 Time: 3 Hours

The figures in the margin indicate full marks.
USE SEP ARA TE SCRIPTS FOR EACH SECTION

SECTION-A
There are FOUR questions in this section. Answer any THREE.
Symbol have their usual meanings

1. (a) How can you rank the order of MEAs (for investment alternative) for their
comparison with rate of return method? - Explain. (10)
(b) What investment criteria should the firm follow when it faces capital rationing? Why? (10)
(c) A piece of production equipment is to be replaced immediately because it no longer
meets quality requirements for the end product. The two best MEAs are a used piece of
equipment (M) and a new automated model (N). The economic estimates for each are

shown in table below. (267j)

Alternatives
'M' 'N'
Capital Investment -$14,000 -$65,000
Annual Expenses -14,000 -9,000
Market Value 8,000 13,000
Useful life (years) 5 20

The MARR is 15% per year. Based on principle of MEA, specify which of the MEAs
you will recommend for the proposed service. Find your answer with ERR method using
a study period of 12 years.

2. (a) Show some basic differences between privately owned and publicly owned projects. (13)
(b) What is self-liquidating project? Give an example is the context of Bangladesh and

explain its purposes. What are the difficulties in evaluating public sector projects? (13 7j)
(c) Two mutually exclusive alternative public projects are under consideration. Their
respective cash flow is included in the table below. Project-I has an anticipated life of 30
years and useful life of project-II has been estimated to be 20 years. If the nominal
interest rate is 7% per period and compounded semi-annually, which are of the projects
should be selected? Assume cotermination and a study period of 20 years. Use modified
B/C ratio method. (20)

Contd P/2
 =2=

CHE 411
Contd ... Q. No.2 (c)

project - I project - II
Capital investment $ 800 x 103 $ 650 X 103
Annual '0' and 'M' $ 125 x 103 $ 115 X 103
Annual benefit $ 250 x 103 $ 235 X 103
Salvage value $ 75 x 103 $ 60 X 103
U sefullife (years) 30 20

3. (a) What is the importance of input output analysis is engineering economy? Explain with

an example.

(b) Each year, sector' A' purchases $ 5 million of goods from sector 'B' and $ 10 million
from sector 'C'. Sector 'B' makes annual purchases of$ 2 million from sector 'A' and $
8 million from sector 'C'. Annual purchases of sector 'C' are $ 3 million from sector 'A'
and $ 6 million from sector 'B'. Within-sector purchases are $ 1 million for sector' A', $
4 million for sector 'B', and $5 million for sector 'C'. Total sales in the sectors are $ 20
million, $ 20 million, and % 30 million, respectively. (30)
(i) Develop 3-sector input/output table
(ii) Write the transaction matrix for the three sectors
(iii) How much is value added for sector 'A'?
(iv) How much is final demand in sector 'A'?
(v) Write the direct-indirect requirements matrix for the model.

4. Write short notes on the following. (11 % x4)

(a) Risk adjusted MARR
(b) Perpetuities and capitalized costs
(c) Capital asset pricing model (CAPM)
(d) General guidelines in estimating net cash flow from the project.

Contd P/3
 =3=

eRE 411
SECTION-B

There are FOUR questions in this section. Question NO.5 is Compulsory

Answer any two from the rest.

5. Compulsory Select the correct answer and give concise reason for your choice. (lOx5=50)
i. Communication begins with
a. encoding
b. idea origination
c. decoding
d. channel selection
ii. Functional managers are responsible
a. for a single area of activity
b. to the upper level of management and staff
c. for complex organizational sub-units
d. for obtaining copyrights and patents for newly developed processes and equipment
iii. The problem-solving process begins with
a. clarification of the situation
b. establishment of alternatives
c. identification of the difficulty
d. isolation of the cause
iv. In what order do managers typically perform the managerial functions?
(a) organizing, planning, controlling, leading
(b) organizing, leading, planning, controlling
(c) planning, organizing, leading, controlling
(d) planning, organizing, controlling, leading
v. Of the following leadership styles which one can be characterized as being "boss-
centered"?
(a) The manager presents the problem
(b) The manager takes care of safety needs of the subordinate (employee)
(c) The manager makes the decision and announces it through an e-mail
(d) The manager invites questions
vi. The most general form of standing plans that specifies the broad parameters within
which organization members are expected to operate in pursuit of organizational goals
are called
(a) Procedures
(b) Programmes
(c) Single-use plan
(d) Policies
(e) Rules

Contd P/4
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CHE 411
Contd ... Q. No.5

vii. Douglas McGregor identified two opposing perspectives (Theory X and Theory Y)
that he believed typified managerial views of employees and suggested that management
must start with the basic question of how managers see themselves in relation to others.
Which ofthe following is not correct about his theory?
(a) Theory X managers view people as having an inherent dislike of work
(b) Theory X managers assume that people are self motivated and do not want to be
directed
(c) Theory Y managers assume that the average person will accept, even seek,
responsibility
(d) Theory Y managers view people as responsible and conscientious
(e) Theory Y managers assume that people are internally motivated to accomplish the
goals and objectives
viii. The communication process is made up of various components. Which of the
following is the actual physical product from the source?
(a) Feedback
(b) Filter
(c) Message
(d) Channel
(e) Understanding
ix. Planning by a supervisor of a goods processing department to rearrange the location of
several pieces of equipment so that the new order can begin on time, three months hence,
would be an example of alan
(a) Tactical plan
(b) Operational plan
(c) Tactical goal
(d) Operational goal
(e) Strategic goal.
x. Which of the following is not true with regard to functional authority?
(a) Functional authority is the authority staff members have over line members within
the limits of their functions
(b) Functional authority has the same effect as line authority but it doesn't have the
right that line authority has, to punish violations or deviations in order to ensure
compliance
(c) Functional authority is limited to those areas where a staff member has some
technical competence
(d) The use of functional authority should be restricted to the procedural aspects of a
function
(e) Functional authority is in sync with the principle of unity of command

Contd P/5
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CHE 411

6. (a) Draw an organization chart showing at least 5 levels for a Bangladeshi chemical and
consumer products manufacturing company having the following features: (21)
• Operates in two regions of the country
• Produces three (3) different types of products
• Develops new products through research ad development
• There are staff supports at the higher level
• Company regularly looks to reinvest profits in new ventures

! (b) This question refers of Technology Management (TM). (8x3=24)

(i) Why is TM more important nowadays compared to 30 years back?
(ii) Explain the Technology lifecyc1e?
(iii) Using a good example explain Sequential Technology S-curves.

7. (a) What is the MATRIX organization? Give an appropriate international example and
elaborate your answer. (20)
(b) List five (5) advantages that help in deciding whether to use a committee or some
other group method of decision making. (10)
(c) In planning we need "Objectives and Goals"? What are these? Use multiple (at least
3) examples to elaborate your answer. (15)

8. (a) The following table shows the activities that need to be undertaken to complete an
engineering project. Calculate the early time, late time and total float for each event.
Identify the Critical Path of the given project with the help of arrow network. (35)
Activity Symbol Estimated Time (weeks) Post Requisite
A 7 E
B 2 E
C 15 I
D 8 F
E 10 G,D
F 2 I
G 5 H,F
H 8
I 2 J
J 3

(b) Why is it important for Chemical Engineers to study MANAGEMENT? Which

management function is most important for Chemical Engineers and why? (10)
 , .. ~

~. c-f",~
L-4ff-2/CHE f(!f'0. #'- . Dale: 17/05/2014
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-4/T-2 B. Sc. Engineering Examinations 2011-2012

Sub: CHE 411 (Economics and Manage~ent of Chemical Process Industry)

Full Marks: 280 Time: 3 Hours
The figures in the margin indicate full marks.
USE SEPARATE SCRIPTS FOR EACH SECTION

. ; SECTION - A
There are FOUR questions in this section. Answer Q. No.1 and any TWO from the rest.

1. COMPULSORY. Select the correct answer and give concise reason for your choice~ (10x5=50)
(a) The three main types of managers include: .
(i) general, specific, and frontline managers.
(ii) general, specific, and detailed managers.
(iii) general, functional, and frontline managers.
. ,
(iv) general, functional, and detailed managers.
I

(b) Technical skills are most important for which of the following:-
(i) first line managers
(ii)middle managers
(iii) vice president-Production
(iv) top managers
(c) Motivation is related to:
(i) planning
(ii) controlling
(iii) leading.
(iv) tactical decisions
(d) The leader of an organization performs .,as per Mintzberg.
(i) An Interpersonal role
(ii) An Informational role
(iii) A Decisional role
(iv) All o(the given options
(e) The degree to which decision making is confined at a single point in an organization
is described as
(i) Unity of command
(ii) Chain of command
(iii) Span of management
. (iv) Centralization
(f) A budget is an example of which of the following plan?
(i) Strategic plan
(ii) Single use plan
(iii) Tactical plan.
(iv) Standing plan
Contd P/2
 • lot,

~:

CHE 411
Contd ... Q. NO.1

(g) A manager who strives to ensure the activities of the organization's employees are
supported and blend well with those of individuals outside the firm could be said to hold
which of the following interpersonal role within the company?
(i) Liaison
(ii) Disseminator ..i
(iii) Figurehead
(iv) Entrepreneur
(h) In Maslow's need hierarchy, a healthy work environment is an example of what type
. .. ~t ,:. : ...
of need?
(i) Physiological
(ii) Esteem
(iii) Safety
(iv) Social t

(i) An office supply firm that has the three departments based upon retail, wholesale, and
governmental buyers is using which of the following types of departmentalizatio~?
J.

(i) Functional
(ii) Product
(iii) Customer
(iv) Geographic
G) Which of the following is a general statement or understanding that guide or
channelize thinking in decision making?
(i) Policy
(ii) Procedure
(iii) Rule
(iv) Project
[Important Note: If you do not provide reason to your choice, your answer will be
considered to be incomplete].

2. (a) Draw hypothetical organisation charts for "FACEBOOK" and "UNILEVER". How
are they different? What are the reasons for the difference? Explain fully with examples
of specific issues. (25)
(b) With the help of a figure explain Technology Life Cycle. What are'S' curves in
technology management? Choose a suitable technology example to explain three
sequential'S' curves. (20)

3. (a) Briefly describe with figures three (3) communication networks. (12)
. (b) A company wants to start a new business of marketing LPG in Bangladesh. Describe
the planning that is required to execute the venture using "A .Model for Planning
Approach" described in your textbook. (21)
(c) There are seven (7) Principles of Control. Describe any four (4) of these. (12)
Contd P/3
 '-~

<.
=3=

CHE 411

4. (a) A project consists of eight activities whose durations are as follows: (30)
Activity A B C D E F G H

Duration 4 4 3 5 4 1 6 5

The precedence relations are is follows:

B must follow A
D must follow A and C
F must followC and E
G must follow C and E
H must follow B and D
Draw an activity network and find the critical path.
(b) Think of a problem that was creatively solved. Did the solution come from group
discussion, or was it the result of an individual effort? Reconstruct the phases of the
. /"""'.
creatIve process. (15)

SECTION -B
There are FOUR questions in this section. Answer any THREE.
.. J

5. (a) Develop the expression for capitalized cost based on discrete interest compounding. (10)
(b) A heat exchanger has been designed for use in a chemical process. A standard type of
heat exchanger with a negligible scrap value costs $ 4,000 and will have a useful life of 6
years. Another proposed heat exchanger of equivalent, design capacity costs $ 6800 but
will have a useful life of 10 years and. a scrap valueof$ 800. Assuming an effective
~
compound interest rate of 8% per year, deterinine which ,heat exchanger is cheaper by

comparing the capitalized costs. (15)

(c) Data for a mine are as follows: . (21~)

Estimated probable output: 20,000 tons/yr

Time to exhaust property: 12 yearso"'.e..,.
Selling price of mined, dressed and smelted ~ $ 10/ton
Management costs, not including change for depletion: $ 5,000/yr
Costs of operating mine and smelter: $ 7.53/ton
Desired nominal interest rate: .8% compounded quarterly
Draw the cash flow diagram and comment on the economic feasibility of the project by
PWmethod.

Contd ;. P/4
 ..
=4=

CHE 411 '."

6. (a) What are the difficulties associated with the IRR method for project evaluation?

Explain with example. (10)

(b) A piece of new equipment has been~ proposed by engineers to increase the
productivity of a certain manual welding operation. The investment cost is $ 25,000 and
the equipment will have a salvage value of $ 5,000 at the end of its expected life of 5
>
years. Increased productivity attributable to the equipment will amount $ 8000/yr after
extra operating costs have been subtracted from the value of the additional production.
MARR for this alternative is 20% per year.
(i) Suppose E = MARR = 20%. What is the ERR of the alternative? Is the alternative

acceptable? (167j)

(ii) Find discounted payback period for the above stated alternative and comment on your

result. (20)

7. (a) A certain service can be performed satisfactorily by either MEA[)'M' or 'N'.

Alternative 'M' has a first cost of $ 8,000, an estimated service life of 10 years, no market
value and annual revenue less expenses of $ 2,400. The corresponding figures for
alternative 'N' are $ 18,000, 20 years, market value equals to 20% of the first cost~ and
$ 4,000. Based on principle of MEA, specify which of the MEAs will you recommend for
that service, if the MARR is 15%? Find your answer with FW method using a study

period of 16 years. (20)

(b) .Three mutually exclusive alternative public work projects are under consideration.
Their respective cash flow is included in the table below. Project-I has an anticipated life
of 45 years and useful lives of project-II and project-III have been estimated to be 35 and
25 years respectively. If the nominal interest rate is 10%, which one of the projects

should be selected by assuming repeatability with conventional H/C ratio method? (267j)

Parameters Project-I Project-II Project-III

3 3
Capital Investment $ 875 x lOJ $ 750 x 10 $ 625 x 10

Annual 0 and M J $ 120 x 103 $ 110 x 103

$ 130 x 10
- r,;
3 3
Annual benefit $ 260 xJ...OJ $ 245 x 10 $ 230 x 10

Useful life (years) 45 35 25

8. (a) How can you rank the order of MEAs (for investment alternative) for their

comparison with rate of return method? Explain. .(10)

(b) What investment criteria should the firm follow when it faces capital rationing? Why? (10)

Contd P/5
..
=5=

CHE 411
Contd ... Q. NO.8

(c) The best (most likely) cash flow estimates are given below for a new piece of .
equipment being considered for immediate installation. Because of the new technology
built into this machine, it is desired to investigate its PW over a range of:t 30% chang~n
the estimates for (i) annualnet cash flow and (ii) useful life. Best on these best estimates,
plot a diagram that summarizes the sensitivity of PW to percent deviation changes in each

separate factor estimate when the MARR = 12%. Comment on the results. (26 %)
Given:
Capital Investment $ 11,500
Revenue/yr $ 5,000
Expenses/yr $ 2,000
Market value $ 1,000
U sefullife ' . 6 years.

'/ ( .