Imse 377 Advanced Engineering Economy

IENG 577 ADVANCED ENGINEERING ECONOMY

SPRING 2008

Prerequisites: IMSE 377 or equivalent, or instructor consent

Text: - CourseADVANCED ENGINEERING ECONOMICS

Chan S. Park and Gunter P. Sharp-Bette, 1990

John Wiley and Sons

Notes:Accounting & Costing Fundamentals, Dr. L. T. Moore(check your e-mail)

Skills and Knowledge of Cost Engineering, 3rd. Edition

Instructor: Dr. Robert C. Creese, CCE

359-D MERBuilding

293-4607-ext-3711

e-mail

WeekTopicAssignment Due Friday of week

1Introduction, Accounting & Costing Fundamentals Notes: T-Account Problems

Purcell Diagrams, Financial Flows pages 18-22

2Accounting & Cash FlowsT-Account Problems p 43-49, Chapter 1-1,3-6

Research Project Assignment & Team Formation- Jan 22

3Engineering Economy ReviewChapter 2-1,3,5,9, 10,15,19,20,

23(modified to Table 2.7 & 40%)

4Engineering Economy ReviewChapter 2-6, Chapter 4-2,10,11

How to Depreciate Property – IRS Pub 946

Initial Research Paper Bibliography Due-Feb 5

5Engineering Economy ReviewChapter 4-16,22, Derive MACRS schedule for a 4 year life

6Modeling & Transformation TechniquesChapter3-2(cash flow 2 only), 4,5

Detailed Paper Outline Due Feb 21

7 Measures of Investment Worth – Single Project Chapter 6-1,7 + assigned Problem

8 Midterm March 4

9Project & Cost Control S&K notes, Ch9 1-5

10Project & Cost ControlS&K notes, Ch13-Risk Problem

Draft of 1st 3rd of Research Paper Due-March 13

11Capital Budgeting Models(Chapter 8)Assigned Problems

12Capital Budgeting Models(Planning Horizons)Chapter 8-4(budget of $ 15,000 instead of $ 13,000), 8-12

Draft Research Paper Due – April 8

13Final Research Paper Due-April 17Prepare Presentation

14Research Paper Presentations – Start April 22

15Course Evaluations, Review, Make-up

16May 7th , 15:00-17:00 Final Exam

Evaluation & Grading

EvaluationGrading

MidtermExam25%A > 90%

Research Paper35% 90 > B > 80%

Final Exam40% 80 > C > 70%

70 > D > 60%

F < 60%

No hats will be worn in class except for religious or health reasons. No eating in the classroom.

A grade of zero will be assigned for any exam for which prior arrangements have not been made. Make-up tests will generally precede regular scheduled exams.

Homework is to be done on Engineering Paper, quadrille paper or as a computer output. Homework is due on the first day of class following the assigned week. Students will be expected to present problems in class.

Attendance will be taken during the first 10 minutes of class and late is counted as absent. Students with more than 8 absences will not receive a passing grade for the course. Attendance records will begin the second week of classes.

Students are encouraged to become student members of AACE, International and attend the meetings on campus.

Research Project

The research project will be to develop materials for an undergraduate on-line engineering economics course. There are seven areas and teams of 3(2-4) students will work on an approved section. Tese sections are on the last page of the syllabus.

Research Project Schedule Schedule

Jan 22thSelection of Research Project and Final Team Formation

Feb 5thBibliography 10 references minimum, at least 5 from books and give pages of interest, not the total book(2 points)

Feb 21stDetailed Outline of Research Paper Due(3 points)

March 13thDraft of 1st third of project due(5)

April 8thPreliminary Draft of Complete Research Paper Due(5)

April 17thResearch Paper Due at start of class- NO LATE PROJECTS

April 22ndPresentations of Projects(20 minutes per group), Course Evaluations

Non-discrimination Statement: I expect to maintain a positive learning environment based upon open communication, mutual respect, and non-discrimination(race, sex, age, disability, veteran status, religion, sexual orientation, color, or national origin) in this course. If you anticipate any type of accommodation in order to participate in this class, please make the appropriate arrangements with Disability Services(293-6700) and advise me of those arrangements. Suggestions for improving the positive learning environment in this class will be appreciated.

Academic Dishonesty Statement

WVU expects that every member of its academic community shares the historic and traditional commitment to honesty, integrity, and the search for truth. Students participating in academic dishonesty activities may receive penalties such as an unforgivable F for the course or a grade of zero. Academic dishonesty is defined to include but is not limited to any of the following:

Plagiarism is defined in terms of proscribed acts. Students are expected to understand that such practices constitute academic regardless of motive. Those who deny deceitful intent, claim not to have known that the act constituted plagiarism, or maintain what they did was inadvertent are nevertheless subject to penalties when plagiarism has been confirmed. Plagiarism includes, but is not limited to: submitting, without appropriate acknowledgment, a report, notebook speech, outline, theme, thesis, dissertation, or other written, visual, or oral material that has been copied in whole or in part from the work of others, whether such source is published or not, including( but not limited to) another individual’s academic composition, compilation, or other product, or commercially prepared paper.
Cheating and dishonest practices in connection with examinations, papers, and projects, including, but not limited to:

a. Obtaining help from another student during examinations.

b. Knowingly giving help to another student during examinations, taking an examination or doing academic work for another student, or providing one’s own work for another student to copy and submit as his or her own.

c. The unauthorized use of notes, books or other sources of information during examinations. The unauthorized use of calculators or computers programmed with formulas, equations, or notes, which have not been approved by the instructor for your use on the exam.

d. Obtaining without authorization an examination or any part thereof.

Forgery, misrepresentation or fraud:

a. Forging or altering, or causing to be altered, the record of any grade in a grade book or other educational record.

b. Use of University documents or instruments of identification with intent to defraud.

c. Presenting false data or intentionally misrepresenting one’s records for admission, registration, or withdrawal from the University or University course.

d. Knowingly presenting false data or intentionally misrepresenting one’s records for personal gain.

e. Knowingly furnishing the results of research projects or experiments for the inclusions in another’s work without proper citation.

f. Knowingly furnishing false statements in any University academic proceeding.

Research Papers - Prepare a section for an on-line engineering economics course. Develop materials, example problems, test problems for evaluation of section and for a Final Examination. Problems are to be set to have multiple inputs and solutions be calculated automatically.

Sections:

1. Introduction to engineering economy

Basic terms and definitions, why cash flows instead of profits, brief history

Breakeven analysis

Improvement curves

Types of interest, Types of dollars

2. Finance, accounting and engineering economy relationships with respect to cash flows

“t”account

Purcell Diagrams

P&T Statement and Balance Sheet relationships and Purcell Diagram

3. Fundamental Engineering Economic Expressions

Single Cash Flows

U:niform Series

Uniform gradient

Geometric Gradient and Escalation

4. Cash Flows Before Taxes and After Taxes

Cash Flows Before Taxes

Taxes and Depreciation Types

Straight Line

Double Declining Balance

MACRS

Section 179

Production

Sum-of-digits

5. Project Evaluation Techniques

Present Worth

Future Worth

Average Annual Cost

Payback period

Return on Investment

Return on Average Investment

Internal Rate of Return

Modified Rate of Return

6. Special Topics

Benefit Cost Analysis

Replacement Analysis

Incremental Rate of Return

Loan Payments and Interest – sums of interest and principal

Currency Exchanges

Inflation

Buy-Lease considerations

7. Risk , Probability and Earned Value Considerations

Discrete and Continuous Distributions

Mean and Standard Deviations

Normal distribution, triangular distribution

Confidence Limits of Estimates

Schedule Performance Index, Schedule Variance

Cost Performance Index, Cost Variance

Forecasting – Estimate at Completion, (cost estimate, schedule estimate)

Work Progress Measurement

Weekly and Cumulative Performance Measurement

IMSE 577 Spring 2008