FX-MTOM-700 Course Guide

Engineering EconomicsSpring 2018

Course Guide to

FX-MTOM-700 – Engineering Economics

There are two types of education. One should teach us how to make a living and the other how to live.

-John Adams

Introduction

Engineers perform technical work to support the "business" objectives of the organization they work for (corporation, government). It is therefore important that they understand that "business" because it will influence the judgments they make. Economic evaluations provide the main source of the organization's information by which investment and operational decisions are made regarding the most effective use of resources. It is these decisions corporate value is being created (or destroyed).

There are many subtleties and assumptions that underlie the apparently straight-forward economic calculations that are often seen. Consequently, a fundamental understanding of the concepts behind economic evaluation and of techniques for performing them within a corporate decision making context, are essential skills. Furthermore, as all investment decisions are made without knowing what the future holds, understanding the uncertainties we face in any given decision situation is essential for good decision-making.

This course provides the tools necessary for engineers to economically evaluate their uncertainties and decisions. It also allows engineers to communicate with the “business” world, which is generally more interested in monetary values, and their risks, than engineering tolerances and specifications.

Course Staff

Instructor: Reidar B Bratvold,

Email:.

Home page:

Office: E-396

Phones: 51 83 2260, 976 51 969

Class Delivery:

We will meet as follows:

Lectures / Dates / Location
1st lecture / 15January
16 January
2nd lecture / 19 February
20 February
3rd lecture / 12 March
13 March
Exam

A great deal of the learning and value of this course comes from in-class discussions; therefore, attending lectures regularly and keeping up with thereadings and assignments is essential to ensure a rewarding learning experience (as well as a good grade).

We will do some interactive computer work as well as cases in class so please bring your laptops.

We will not cover the entire curriculum in the class and you will be assigned independent readings throughout the semester. The details will be provided both in class and on ItsLearning.

Problem sets will be assigned throughout the semester. These assignmentsare NOT compulsory but provide an excellent opportunity to practice questions and problems of the type that will be given on the exams. Solutions to these exercises will not be handed out but will be discussed in class.

Course Readings

The textbook we will use in this course is: Bratvold, R.B. and S.H. Begg, Making Good Decisions, SPE Press (2010).Copies will be provided at cost (i.e. no profit for me).

The following book is recommended as it provides a good overview of engineering economics (but not decision making).

Park, C.S., 2016, Contemporary Engineering Economics (6th edition), Pearson/Prentice Hall

In addition, relevant papers and other material will be made available on Canvas.

Assumed Knowledge

  • BSc in Engineering or equivalent

Assessment

The grade for the course will be based on the final exam.

R.B. BratvoldPage 1 of 2