Engineering Economic Decisions

L1: Engineering Economic Decisions
ECON 320 Engineering Economics Mahmut Ali GOKCE Industrial Systems Engineering Computer Sciences

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Lecture No.1 Chapter 1 Engineering Economic Decisions
 Rational Decision- making Process  The Engineer’s Role in Business  Types of Strategic Engineering Economic Decisions  Fundamental Principles in Engineering Economics

Bose Corporation

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Chapter Opening Story - Bose Corporation
 Dr. Amar Bose, a graduate of electrical engineering, an MIT professor, and Chairman of Bose Corporation.  He invented a directional home speaker system that reproduces the concert experience.  He formed Bose Corporation in 1964 and became the world’s No.1 speaker maker.  He became the 288th wealthiest American in 2002 by Forbes magazine.

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Engineering Economics Overview
• • • • • • Rational Decision-Making Process Economic Decisions Predicting Future Role of Engineers in Business Large-scale engineering projects Types of strategic engineering economic decisions www.izmirekonomi.edu.tr Rational Decision-Making Process
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Recognize a decision problem Define the goals or objectives Collect all the relevant information Identify a set of feasible decision alternatives Select the decision criterion to use Select the best alternative

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Which Car to Lease? Saturn vs. Honda
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Recognize a decision problem Define the goals or objectives Collect all the relevant information Identify a set of feasible decision alternatives Select the decision criterion to use Select the best alternative

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Need a car
Want mechanical security Gather technical as well as financial data Choose between Saturn and Honda Want minimum total cash outlay Select Honda

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Financial Data Required to Make an Economic Decision

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Engineering