Industrial Engineering
Bachelor	TR-NQF-HE: Level 6	QF-EHEA: First Cycle	EQF-LLL: Level 6

General course introduction information

Course Code:

END318

Course Name:

Engineering Economics

Course Semester:

Fall

Course Credits:

Theoretical	Practical	Credit	ECTS
3	0	3	6

Language of instruction:

Course Requisites:

Does the Course Require Work Experience?:

Type of course:

Compulsory

Course Level:

Bachelor

TR-NQF-HE:6. Master`s Degree

QF-EHEA:First Cycle

EQF-LLL:6. Master`s Degree

Mode of Delivery:

Face to face

Course Coordinator :

Dr.Öğr.Üyesi MEHMET TEVFİK ÇOBANOĞLU

Course Lecturer(s):

Öğr.Gör. B.Öğretim Elemanı
Dr.Öğr.Üyesi MEHMET TEVFİK ÇOBANOĞLU
Prof. Dr. FATMA ÇİĞDEM ÇELİK

Course Assistants:

Course Objective and Content

Course Objectives:

I. To gain the ability of applying economic analyses in the related engineering discipline,
II. To understand the major capabilities and limitations of discounted cash flow analysis for evaluating proposed capital investments.
III. To be able to recognize, formulate, and analyze cash flow models in practical situations. Understand the assumptions underlying these models, and the effects on the modeling process when these assumptions do not hold.
IV. To be able to communicate the results of the modeling process to management and other non-specialist users of engineering analyses.

Course Content:

Terminology and cash flow diagrams. Interest factors and their use. Nominal and effective interest rates. Continuous compounding. Present worth and capitalized cost analysis. Uniform annual cash flow analysis. Rate of return analysis. Internal and external rates of return. Benefit / cost ratio analysis. Payback period analysis. Replacement analysis. Inflation-interest relations. Depreciation. Depletion. After-tax economic analysis. Breakeven analysis. Capital budgeting under budget constraints. Sensitivity analysis and decision trees. Investment analyses under risk.

Learning Outcomes

The students who have succeeded in this course;

Learning Outcomes

1 - Knowledge
Theoretical - Conceptual
1) I. Move single cash flows along a time line using a compound interest rate; Move annualized cash flows along a time line using a compound interest rate; Move gradient and escalating cash flows along a time line using a compound interest rate.
2) II. Convert nominal and effective interest rates.
3) III. Convert cash flows into Net Present Worth (NPW), net future worth, annualized series, gradient series or escalating series.
4) IV. Compare alternatives using NPW.
5) V. Compare alternatives with differing life-cycles and Compare infinite-life projects using capitalized costs.
6) VI. Compute an Internal Rate of Return (IRR) for a set of cash flows and Identify spurious IRR from complex cash flows.
7) VII. Compare alternatives using Rate-Of-Return (ROR) analysis.
8) VIII. Classify benefits, disbenefits and cost for Benefit/Cost analysis.
9) IX. Apply fundamental income taxation, inflation, and depreciation to their analysis
10) X. Apply economic analysis under risk and uncertainty and multiple criteria
2 - Skills
Cognitive - Practical
3 - Competences
Communication and Social Competence
Learning Competence
Field Specific Competence
Competence to Work Independently and Take Responsibility

Lesson Plan

Week	Subject	Related Preparation
1)	Basic concepts, graphs, role of engineering economics in decision making, discounting and equivalence
2)	Discounting factors and their usage; usage of multiple factors; nominal and effective interest rates; continuous discounting
3)	Present worth analysis; capitalized cost analysis; equal life alternatives; different life alternatives
4)	Equivalent uniform annual cash flow analysis; equal life alternatives; different life alternatives; rate of return calculations; number of sign changes in cash flows and external investments
5)	Incremental rate of return analysis, benefit/cost ratio analysis; future worth analysis
6)	Replacement analysis, defender and challenger, economic life
7)	Replacement analysis, defender and challenger, economic life
8)	Depreciation and depletion, income taxes, after tax cash flow, inflation and interest
9)	Breakeven analysis; capital budgeting for independent investment alternatives
10)	Sensitivity analysis, expected value decisions, decision trees
11)	Decision making under risk, uncertainty and risk, simulation, certainty equivalent, risk adjusted cash flow approach
12)	Decision making under risk, uncertainty and risk, simulation, certainty equivalent, risk adjusted cash flow approach
13)	Multiple criteria evaluation of investments
14)	Multiple criteria evaluation of investments

Sources

Course Notes / Textbooks:	Fundemantals of Engineering Economy Second edition( Chan S. Park)
References:	Engineering Economy 16th Edition E. Sullivan

Course-Program Learning Outcome Relationship

Learning Outcomes	1	2	3	4	5	6	7	8	9	10
Program Outcomes
1) Adequate knowledge in mathematics, science and engineering subjects pertaining to the relevant discipline; ability to use theoretical and applied information in these areas to model and solve engineering problems.
2) Ability to identify, formulate, and solve complex engineering problems; ability to select and apply proper analysis and modelling methods for this purpose.
3) Ability to design a complex system, process, device or product under realistic constraints and conditions, in such a way so as to meet the desired result; ability to apply modern design methods for this purpose. (Realistic constraints and conditions may include factors such as economic and environmental issues, sustainability, manufacturability, ethics, health, safety issues, and social and political issues according to the nature of the design.)
4) Ability to devise, select, and use modern techniques and tools needed for engineering practice; ability to employ information technologies effectively.
5) Ability to design and conduct experiments, gather data, analyse and interpret results for investigating engineering problems.
6) Ability to work efficiently in intra-disciplinary and multi-disciplinary teams; ability to work individually.
7) Ability to communicate effectively i Turkish, both orally and in writing; knowledge of a minimum of one foreign language.
8) Recognition of the need for lifelong learning; ability to access information, to follow developments in science and technology, and to continue to educate him/herself.
9) Awareness of professional and ethical responsibility.
10) Information about business life practices such as project management, risk management, and change management; awareness of entrepreneurship, innovation, and sustainable development.
11) Knowledge about contemporary issues and the global and societal effects of engineering practices on health, environment, and safety; awareness of the legal consequences of engineering solutions.

Course - Learning Outcome Relationship

No Effect	1 Lowest	2 Low	3 Average	4 High	5 Highest

	Program Outcomes	Level of Contribution
1)	Adequate knowledge in mathematics, science and engineering subjects pertaining to the relevant discipline; ability to use theoretical and applied information in these areas to model and solve engineering problems.	4
2)	Ability to identify, formulate, and solve complex engineering problems; ability to select and apply proper analysis and modelling methods for this purpose.	3
3)	Ability to design a complex system, process, device or product under realistic constraints and conditions, in such a way so as to meet the desired result; ability to apply modern design methods for this purpose. (Realistic constraints and conditions may include factors such as economic and environmental issues, sustainability, manufacturability, ethics, health, safety issues, and social and political issues according to the nature of the design.)	2
4)	Ability to devise, select, and use modern techniques and tools needed for engineering practice; ability to employ information technologies effectively.	3
5)	Ability to design and conduct experiments, gather data, analyse and interpret results for investigating engineering problems.
6)	Ability to work efficiently in intra-disciplinary and multi-disciplinary teams; ability to work individually.
7)	Ability to communicate effectively i Turkish, both orally and in writing; knowledge of a minimum of one foreign language.
8)	Recognition of the need for lifelong learning; ability to access information, to follow developments in science and technology, and to continue to educate him/herself.
9)	Awareness of professional and ethical responsibility.	5
10)	Information about business life practices such as project management, risk management, and change management; awareness of entrepreneurship, innovation, and sustainable development.
11)	Knowledge about contemporary issues and the global and societal effects of engineering practices on health, environment, and safety; awareness of the legal consequences of engineering solutions.

Learning Activity and Teaching Methods

Expression
Brainstorming/ Six tihnking hats
Individual study and homework
Lesson
Homework
Problem Solving
Project preparation

Assessment & Grading Methods and Criteria

Written Exam (Open-ended questions, multiple choice, true-false, matching, fill in the blanks, sequencing)
Homework
Individual Project

Assessment & Grading

Semester Requirements	Number of Activities	Level of Contribution
Attendance	1	% 5
Homework Assignments	6	% 5
Midterms	1	% 40
Final	1	% 50
total		% 100
PERCENTAGE OF SEMESTER WORK		% 50
PERCENTAGE OF FINAL WORK		% 50
total		% 100

Workload and ECTS Credit Grading

Activities	Number of Activities	Duration (Hours)	Workload
Course Hours	14	42	588
Homework Assignments	6	6	36
Midterms	1	2	2
Final	1	2	2
Total Workload			628