Dr Ibrahim Masood

E10 – Makmal Automasi Industri

Tel: 07 – 4537774; 012 - 7506367
ibrahim@uthm.edu.my
 Economy …
An economy is the total sum of product and service transactions of value
between two agents in a region, be it individuals, organizations or states.
An economy consists of the economic system, comprising the production,
distribution or trade, and consumption of limited goods and services
between two agents, the agents can be individuals, businesses,
organizations, or governments. Transactions only occur when both parties
agree to the value or price of the transacted good, commonly expressed in
a certain currency (Wikipedia, 2013)

… aktiviti manusia mengguna secara optimum sumber

MANUFACTURING

ekonomi yang terhad untuk memenuhi kehendak yang

tidak terbatas (Rosnah, 2007)

Economy agents
Individual user : to spend money for products and services
Manufacturer : to invest money for manufacturing and gain profits
Government : to manage money from tax and develop country

ENGINEERING ECONOMY (BPK 30902)

 Engineering Economy …
… involves the systematic evaluation of the
economic merits of proposed solutions to
engineering problems (Sullivan et. al., 2012)

… melibatkan penilaian sistematik suatu projek

kejuruteraan berasaskan kebolehlaksanaan di segi
ekonomi (Rosnah, 2007)

Economics analysis technique(s) will be used in

evaluating and selecting the best alternative (based
on several engineering candidates)

ENGINEERING ECONOMY (BPK 30902)

Why engineering economy is important for Engineer …

Engineer have …
 to make decision in purchasing / selling / disposal of
Material, Machines, Tools, Equipments.

 to determine costs of manufacturing.

 to decide the most economical / profitable project for

MANUFACTURING
industry.
Sales
 to prepare for concurrent engineering practice
rather than classical engineering practice.

© 1995 Corel
Corp.
 Classical Engineering (Sequential Approach)

DESIGN

CUSTOMER

MANUFACTURING
Design Engineer

Process Engineer
 Design Product
 Product Spec. Production Engineer
 Material Setup Process
Machine capability Quality
 Eng. Drawing  Run Production Control Engineer
Process Drawing  Monitor machine
 Monitor output  Confirm spec.
 Classical Engineering
Problem

Expectation

End Product

ENGINEERING ECONOMY (BPK 30902)

Concurrent Engineering Vs Seq. Approach
 Engineering economic analysis can
play a role in many types of situations.
• Choosing the best 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.

Copyright ©2012 by Pearson Education, Inc.

Engineering Economy, Fifteenth Edition
Upper Saddle River, New Jersey 07458
By William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling
All rights reserved.
Seven (7) fundamental principles of
engineering economy…
• Develop the alternatives
• Focus on the differences
• Use a consistent viewpoint
• Use a common unit of measure
• Consider all relevant criteria
• Make uncertainty explicit
• Revisit your decisions

Copyright ©2012 by Pearson Education, Inc.

Engineering Economy, Fifteenth Edition
Upper Saddle River, New Jersey 07458
By William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling
All rights reserved.
Engineering economic analysis procedure…

• Problem definition
• Development of alternatives
• Development of prospective outcomes
• Selection of a decision criterion
• Analysis and comparison of alternatives.
• Selection of the preferred alternative.
• Performance monitoring and post-evaluation of
results.

Copyright ©2012 by Pearson Education, Inc.

Engineering Economy, Fifteenth Edition
Upper Saddle River, New Jersey 07458
By William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling
All rights reserved.
 Problem …

UTHM student to find for residency during beginning

of the semester. Apply the EE analysis procedure
for this case …

Problem definition
Development of alternatives
Development of prospective outcomes
MANUFACTURING

SelectionMANUFACTURING
of a decision criterion
PLANNING
Analysis and comparison of alternatives.
Selection of the preferred alternative.
Performance monitoring and post-evaluation of
results.
Solutions to engineering problems must
• promote the well-being and survival of an
organization,
• embody creative and innovative technology and
ideas,
• permit identification and scrutiny of their
estimated outcomes, and
• translate profitability to the “bottom line” through
a valid and acceptable measure of merit.

Copyright ©2012 by Pearson Education, Inc.

Engineering Economy, Fifteenth Edition
Upper Saddle River, New Jersey 07458
By William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling
All rights reserved.
 Important Concepts in Engineering Economy…
The roles of Engineering activity to the society:

 to produce goods and services

- building, house
- transport, car
- electronics devices – computer, mobile

• to sell at a marketableMANUFACTURING
price RM1 bil.
- suit for consumer buying power

• Consider social importance:

- High quality
- Good for environment / sustainability
- Follow country rules and regulations

ENGINEERING ECONOMY (BPK 30902)

 Example …

 Syarikat bercadang mengeluarkan basikal kanak-kanak

berumur 3 tahun.
Jika anda seorang jurutera yang mengendalikan
pengeluaran produk tersebut, huraikan ciri rekabentuk, kos
pengeluaran dan harga keluaran kilang.

Huraian:
 Ciri penting basikal ialah keselamatan, tahan lama dan stabil.
MANUFACTURING
Minimum 3 tayar, saiz kecil, ringan dan tiada bucu tajam.
MANUFACTURING
 Bahan tidak merbahaya kepada kanak-kanak, tidak mudah patah
MANUFACTURING
atau terbakar. Bukan kaca. Plastik dan besi bersalut adalah bahan
MANUFACTURING
PLANNING
yang sesuai. PLANNING

Kos Pengeluaran: -bergantung kepada bahan, buruh, mesin,

kadar faedah dan inflasi.
Harga: -mampu dibeli oleh pengguna sederhana.