IE 23111 Industrial Engineering Department ECONOMIC ANALYSIS IN ENGINEERING CONTEXTS Course Catalog Description: (3) Prerequisite: MATH 1351. Theory and practice of economic decision-making in engineering, business, and personal contexts, including selection between alternatives, break even, risk vs. return, depreciation, taxes, and inflation. Fulfills Core Social and Behavioral Sciences - Individual or Group Behavior requirement. Course Purpose: The primary purpose of this course is to develop in students an understanding of how human beings make economicc decisions in engineering, business and personal contexts, such as the capital budgeting process, personal financial management, and project management. Students will learn a variety of analyticall techniques used to predict, explain and inform human economic behavior, as well apply these techniques to case study problems with societal and ethical components in engineering, business and personal contexts, such case studies on the relative economic attractiveness of hybrid vehicles,, plant location decisions, and the economics of healthcaree systems. Another key focus of the course will bee understanding how human beings deal with risk, such as uncertainty in investment timeframe and future costs and benefits, and what analytic techniques are available to support decision-making under risk, including when one or more risks is societal in nature. Finally, throughout the course, course lectures and problem-solving exercise (in-class and exams) will apply the scientific methods to assess and critique how well a structured, rationall decision-making processs appears to describe human behavior in making economic choices in engineering, business and personal contexts. This course satisfies the Texas Tech University core curriculum requirement in social and behavioral science. Courses in this category focus on the application of empirical and scientific methods that contribute to the understanding of what makes us human. Courses involve the exploration of behavior and interactions among individuals, groups, institutions, and events, examining their impact on the individual, society, and culture. The objective of a social and behavioral science componentt of a core curriculum is to increase the student s knowledge of how social and behavioral scientists discover, describe, and explain the behaviors and interactions among individuals, groups, institutions, events, and ideas.. Such knowledge will better equip students to understand themselves and the roles they play in addressing the issues facing humanity. Students graduating from Texas Tech University should be able to demonstrate the ability to assess critically claims about social issues, human behavior, and diversity in human experiences. Instructor: Feri Afrinaldi IE 209 Office hours Mo Fr, 10:00 AM 11:00 AM and by appointment E-mail: feri.afrinaldi@ttu.edu Class Meeting Time and Room: Section 7: Mo, Wedd and Fri, 3:000 PM 3:50 PM, IE Room 205 1
Course Website: Course handouts (example problems), homework problems, practice exams, and other relevant course materials will be posted on the Blackboard course website. Quiz and exam solutions will be debriefed in class. http://www.depts.ttu.edu/lms/index.php Text: Newnan, D.G., T.G. Eschenbach, and J.P. Lavelle (2011). Engineering Economic Analysis, (12th ed.), Oxford University Press, Oxford. Any recent edition will suffice for the course. Grading Policy: The grading scale is as follows: It is points based grading scale, not percentage. 89.5-100 A 79.5 89.4 B 69.5 79.4 C 59.5 69.4 D Below 59.5 F Grades will be calculated based on the following: Social Aspects of Eng Eco 8% Quiz Average 20% Exam Average 72% 100% 1. There will be four exams, including the final (Exam 4). The exam portion of your grade will be 72% of your course grade (the exams will be equally weighted). Only your three highest exam scores will be used to determine the exam portion of your course grade (i.e., each of the three exams counted is worth 24% of your final course grade). Thus, if you miss any one exam for a non-excusable reason, you will receive a zero for that exam, but it will not hurt your grade if you take the three other exams. There will be no make-up exams except in the cases noted below (see sixth bullet point). 2. There will be 10 in-class quizzes (see course schedule). There will be no make-up quizzes except in the cases noted below (see sixth bullet point). The quiz portion of your grade will be 20% of your course grade (the quizzes will be equally weighted). 3. Social Aspects of Engineering Economic will be graded through 1 essay reviewing the following paper: Wübbenhorst, K. L. (1986). Life cycle costing for construction projects. Long Range Planning, 19 (4), 87-97. 4. Homework problems for each chapter will be assigned (see course website) but will not be collected or graded. Therefore, please feel free to work together on the homework problems. Completing the homework problems is an excellent way to prepare for the quizzes and exams. 5. A practice exam will also be posted to the course website before each exam. The practice exam will not be collected or graded. 6. Make-up exams and quizzes will only be permitted for officially documented absences. All documented absences due to religious observances and officially approved trips (see the Texas Tech University Catalog) will be guaranteed a make-up opportunity. Absences due to other unavoidable reasons (e.g., death in the family, illness) will be considered on a case-by-case basis, with appropriate documentation required. Except in the case of an emergency, the student must always seek instructor 2
consent prior to the absence. Make-up work will be scheduled at the discretion of the instructor, and might occur before the scheduled absence. Typically, make-up work will be scheduled as close to the original assignment date as possible. Generally, students who miss quizzes for officially documented absences will have the grade for that quiz replaced with the grade of the next quiz. Course Calculator Policy: The approved calculators for this course will follow the NCEES website guidelines. The list of approved calculators for the FE exam, can be found at the NCEES website (http://www.ncees.org/exams/examday_policies/calculator_policy.php). To protect the integrity of its exams, NCEES limits the types of calculators that may be brought to the exam room. The only calculator models acceptable for use during the FE exam (and for this course) are listed below. Any student found using a calculator during an exam, quiz, or any other tested in class assignment that is not on the approved list will result in a grade of zero on that test, quiz or assignment. Approved List: Casio: All fx-115 models. Any Casio calculator must contain fx-115 in its model name. Examples of acceptable Casio fx-115 models include (but are not limited to) o fx-115 MS o fx-115 MS Plus o fx-115 MS SR o fx-115 ES Hewlett Packard: The HP 33s and HP 35s models, but no others. Texas Instruments: All TI-30X and TI-36X models. Any Texas Instruments calculator must contain either TI-30X or TI-36X in its model name. Examples of acceptable TI-30X and TI-36X models include (but are not limited to) o TI-30Xa o TI-30Xa SOLAR o TI-30Xa SE o TI-30XS Multiview o TI-30X IIB o TI-30X IIS o TI-36X II o TI-36X SOLAR E-mail Communications: You are required to use your TTU email address for the purposes of this class. The instructor will not be responsible for: 1) Emails from that do not reach you because you do not check or use your TTU address; or 2) Emails that I do not receive because they are filtered into junk mail because they do not come from your TTU address; or 3) Emails that you do not receive to your TTU account because your mailbox is full 3
Learning Outcomes and Assessment Methods: TTU Course Learning Outcomes Identify and critique alternative explanations for claims about social issues and human behavior Demonstrate knowledge of the appropriate methods, technologies, and data that social and behavioral scientists use to investigate the human condition. Describe how human beings make economic decisions in engineering, business and personal contexts, including the identification of appropriate analysis tools and techniques Apply economic analysis techniques to case study problems with societal and ethical components in engineering, business and personal contexts Identify, formulate, and solve problems in engineering contexts (related to ABET Outcome e). Coordinating Board Learning Objectives Critical Thinking Skills: to include creative thinking, innovation, inquiry, and analysis, evaluation and synthesis of information Communication Skill: to include effective development, interpretation and expression of ideas through written, oral and visual communication Empirical and Quantitative Skills: to include the manipulation and analysis of numerical data or observable facts resulting in informed conclusions Assessment Methods Multiple-choice and numeric response exam and Class polling (e.g., poll everywhere) Multiple-choice and numeric response exam and Class polling (e.g., poll everywhere) Multiple-choice and numeric response exam and Class polling (e.g., poll everywhere) Assessment Methods Impromptu group and individual presentations Multiple-choice and numeric response exam and Class polling (e.g., poll everywhere) 4
Social Responsibility: to include intercultural competence, knowledge of civic responsibility, and the ability to engage effectively in regional, national, and global communities TTU College-Level Competency Critically assess claims about social issues, human behavior, and diversity in human experience Class discussions on ethics in engineering economic decision-making and existence and impact of the ethical and societal factors that exist in case-study problems Assessment Methods These competencies are assessed throughout the course by way of class discussions and inclass problem solving, objective (multiple choice, numeric response) and short-term answer and essay-based exam questions, and class polling. Administrative Issues: 1. Class will begin promptly. Please let the instructor know in advance if you have a planned absence from recitation. 2. While in class, please turn off (or silence) your cell phone and turn off all music listening devices. 3. All exams and quizzes are open book, closed notes. You are only allowed to bring your course text, calculator, and a writing utensil to all exams. Use of unauthorized aids on exams will result in a grade of zero; additional penalties may follow. 4. I reserve the right to amend this syllabus as needed. Academic Integrity: Individual effort must be demonstrated on all exams and quizzes. Any instance of academic misconduct will be reported to the Dean of students for appropriate action (which includes possible failure in the course and/or dismissal from the University). See the Operating Policy/Procedure 34.12 of Texas Tech University for more details. ADA: Any student who, because of a disability, may require special arrangements in order to meet the course requirements should contact the instructor as soon as possible to make any necessary arrangements. Students should present appropriate verification from Student Disability Services during the instructor s office hours. Please note instructors are not allowed to provide classroom accommodations to a student until appropriate verification from Student Disability Services has been provided. For additional information, you may contact the Student Disability Services office in 335 West Hall or 806-742-2405. 5
Topics: The course schedule on the next page shows which topics will be covered each class day, along with the assigned readings and assignments. Course handouts containing the example problems corresponding to these topics will be posted to the course website by 11:00pm the night before class. Making Economic Decisions, Chapter 1 Engineering Costs and Cost Estimating, Chapter 2 Interest and Equivalence, Chapter 3 Interest Formulas, Chapter 4 Present Worth Analysis, Chapter 5 Annual Cash Flow Analysis, Chapter 6 Rate of Return Analysis, Chapter 7 & 8 Other Analysis Methods, Chapter 9 Depreciation and Taxes, Chapters 11 & 12 Replacement Analysis, Chapter 13 Inflation and Deflation, Chapter 14 Uncertainty and Risk, Chapter 10 Selecting a MARR, Chapter 15 6
IE 2311 Engineering Economic Analysis Course Schedule Spring 2014 Wk Date Topic Reading Assignments 1 2 3 4 5 6 7 8 9 10 11 W 14-Jan Course Introduction F 16-Jan The Economic Decision Making Process M 19-Jan NO CLASS Ch. 1 W 21-Jan Engineering Costs Ch. 2 F 23-Jan Cost Estimating Ch. 2 Quiz 1, Ch. 1-2 M 26-Jan Cash Flow Diagram Ch. 2 W 28-Jan Interest and Equivalence, Nominal Interest Rates Ch. 3 F 30-Jan Effective Interest Rates, Continuous Compounding Ch. 3 Quiz 2, Ch. 2, 3 M 2-Feb Uniform Series Ch. 4 W 4-Feb Uniform Series Cont., Gradient Series Ch. 4 F 6-Feb Gradient Series Cont. Ch. 4 Quiz 3, Ch. 4 M 9-Feb Present Worth Analysis Ch. 5 W 11-Feb Present Worth Analysis Cont. Ch. 5 F 13-Feb Present Worth Analysis Cont. Ch. 5 Quiz 4, Ch. 5 M 16-Feb Annual Cash Flow Analysis Ch. 6 W 18-Feb Annual Cash Flow Analysis Cont./Review for Exam Ch. 6 F 20-Feb Exam 1 - IN CLASS M 23-Feb Annual Cash Flow Analysis Cont. Newnan 1-5, Course Notes, HW, Quizzes Ch. 6 W 25-Feb Rate of Return Analysis Ch. 7 F 27-Feb Rate of Return Analysis Cont. Ch. 7 Quiz 5, Ch. 6, 7 M 2-Mar Rate of Return Analysis Cont. Ch. 7 W 4-Mar Incremental Rate of Return Evaluation Ch. 8 F 6-Mar Incremental Rate of Return Evaluation Cont., Multiple Rates of Returns Ch. 8, Ch. 7A Quiz 6, Ch. 7, 8 M 9-Mar Multiple Rates of Return Cont Ch. 7A Paper Review Due W 11-Mar Future Worth Analysis Ch. 9 F 13-Mar Benefit Cost Ratio Analysis, Payback Period Analysis Ch. 9 Quiz 7, Ch. 7A, 9 M 16-Mar No Class, Spring Break W 18-Mar No Class, Spring Break F 20-Mar No Class, Spring Break M 23-Mar Sensitivity Analysis and Breakeven Analysis Ch. 9 W 25-Mar Depreciation/Review for Exam Ch. 11 F 27-Mar Exam 2 - IN CLASS Newnan 6-9, Course Notes, HW, Quizzes 7
Wk Date Topic Reading Assignments M 30-Mar Depreciation Cont. 12 W 1-Apr Depreciation Cont. Ch. 11 F 3-Apr Basics of Taxation Ch. 11 Quiz 8, Ch. 11 M 6-Apr No Class 13 W 8-Apr After Tax Cash Flow Ch. 12 F 10-Apr After Tax Rate of Return Ch. 12 Quiz 9, Ch. 12 M 13-Apr Replacement Analysis Ch. 13 14 W 15-Apr Replacement Analysis Cont. Ch. 13 15 16 F 17-Apr Inflation and Deflation Ch. 14 Quiz 10, Ch. 13 M 20-Apr Inflation and Deflation Cont Ch. 14 W 22-Apr Review for Exam. F 24-Apr Exam 3 -IN CLASS Newnan 11-14, Course Notes, HWs, Quizzes M 27-Apr Estimation of Future Events Ch. 10 W 29-Apr Selecting MARR Ch. 15 F 1-May Selecting MARR Cont. Ch. 15 17 M 4-May Course Wrap Up-LAST DAY OF CLASS/Review for Final Final T 12-May FINAL EXAM 4:30 PM 7:00 PM. Newnan 1-15, Course Notes, HWs, Quizzes Exam 4 (Final Exam) Note: The FINAL EXAM is a common exam for all sections, meaning all sections will take the exam at the same time in the same place. Announcements of the FINAL EXAM location will be made in lectures before 1 May. It will NOT be at the time scheduled for finals that will be listed in the TTU website for your section s time. 8