Fundamentals of Engineering Economics and Decision Analysis PDF
Preview Fundamentals of Engineering Economics and Decision Analysis
SSeSereireiresie sI sSI SISSSNSNN: : 1: 1 919393939-9-5-52522221211 WWW MMM HHH III TMTMTM &&&CCC MMMooorrrgggaaannn & & & CCClllaaayyypppoooooolll PPPuuubbbllliiissshhheeerrrsss SSSYYYNNNTTTHHHEEESSSIIISSS L LLEEECCCTTTUUURRREEESSS O OONNN E EENNNGGGIIINNNEEEEEERRRIIINNNGGG AAA NNN • T • T • T EEE RRR RRR YYY SSSeereririeieses sE E Edddiititotoorr:r: :S S Sttetevevevenenn F F .F .B .B Baararrrreretetttt, t,U ,U Unniniviveverersrsisitityty yo o fof Wf W Wyyoyomommiiningngg FFFuuunnndddaaammmeeennntttaaalllsss ooofff FFFuuunnndddaaammmeeennntttaaalllsss o oofff E EEnnngggiiinnneeeeeerrriiinnnggg F F F UUU NNN EEEnnngggiiinnneeeeeerrriiinnnggg EEEcccooonnnooommmiiicccsss EEEcccooonnnooommmiiicccsss a aannnddd D DDeeeccciiisssiiiooonnn A AAnnnaaalllyyysssiiisss DDD AAA MMM EEE NNN DDDaavavividid dL L L. .W .W Whhihititmtmmaanann, ,U ,U Unniniviveverersrsisitityty yo o fof Wf W Wyyoyomommiiningngg TTT aaannnddd DDDeeeccciiisssiiiooonnn AAAnnnaaalllyyysssiiisss AAA LLL RRRoononnaalaldld dE E E. .T .T Teererrrryry,y ,B ,B Brririgighghahamamm Y Y oYouounungng gU U Unniniviveverersrsisititytyy SSS O O O FFF TTThhehe ea a uautuhthtohororsrs cs c ocovoveverer tr wt wtwoo og g egenenenererarala lt lot otpopipciciscs: s:b :b abasasicsici ce e nengngigninieneeeererinrinigng ge e cecoconononomommiciciscs as a nandnd dr ri sriskisk ka a nananalaylylsysissis iis ni ni nt ht htihsis its et etxextx.t .tW .W Witihtihtihninin E E E NNN ththtehe et ot otpopipcici co o fo fe fe nengngigninieneeeererinrinigng ge e cecoconononomommiciciscs as a rarere ed d idsisciscucusussssiosioinonsns os o non nt ht htehe et it mitmimee ev v avalaululeue eo o fo fm fm moononeneyey ya a nandnd di ni nitnetetrereresests tr tre relealaltaitoitoinonsnshshihpipisps.s.. GGG TTThhehesesese ei ni nitnteterereresestst rt r erelealaltatiotioinonsnshshihpipisps sa a rarere eu u suseseded dt to to od d edefiefinfinene ec c ecerertrtataianini np p rprorojoejejcectct ct c rcritriteitereriariai at th thahatat at a rarere eu u suseseded db b yby ye e nengngigninieneeeerersrs sa a nandndd INEINEINE EEE pprprorojoejejcectct mt m maanananagagegerersrs ts to to os se seleelelcectct tt th thehe eb b ebesestst et e cecoconononomommicici cc c hchohoiociciece ea a mammoonongng gs se sevevevererarala la la latltelterernrnanatativtivieveses. s.P .P rProrojoejejcectctsts es e xexaxamammininieneded dw w wilillilll RRR ininicnclcululdudede eb b obotothth hi ni nicncocomommee-e-a-anandnd ds se serervrvivciciece-e-p-prprorododuducucicninigng gi ni nivnveveseststmtmmeenentntsts. s.T .T Thhehe ee e feffeffefcectctsts os o fo fe fe sescscacalaalaltatiotioinon,n ,i ,ni niflnflaflatatiotioinon,n ,a ,a nandnd dt ta taxaxexesess INININ GGG oonon nt ht htehe ee ec ecoconononomommicici ac an ananalaylylsysissis ios o fo fa fal atletletrernrnanataitvitvieveses as ar aerer de d idsisciscucususssseseded.d .R .R Risiskisk ka an ananalaylylsysissis iis ni nicncocororprpopororarataetetses ts ht htehe ce co cononcncecepeptpstst os o fo fp fp rpororbobabababibliilitilytiyty E E E CCC aanandnd ds st satattaitsitstisitcitciscs is ni ni nt ht htehe ee e vevavalaululauataitoitoinon no o fo fa fa latletletrernrnanataitvitvieveses. s.T .T Thhihsis ias a lallollolwowwss ms m maanananagagegememmeenentn tt tot ot od d edeteetetrermrmmininiene et ht htehe ep p rprorobobabababibliilitiltyity yo o foff OOO NNN ssusucuccccecesessss os o ror fr af afialiuliulrurere eo o fo ft fht htehe ep p rprorojoejejcectc.t .tT .T wTwwoo ot ty typypepeses os o fo fs fse senensnsitsiitivitviivtityity ya a nananalaylylsyseseses as a rarere ep p rpreresesesenentnetetded.dT.T.Thhehe efi fi rfirsrsts ti tsi s irs re refeefefrerrrrereded dt ot ot oa a sass OOO MMM tththehe er r aranangngege ea a papppprproroaoacachch hw w whhihlieliel et t hthehe es s esececoconondnd du u suseseses sp p rprorobobabababibliilisilsitstictici cc c ocononcncecepeptptsts st t oto od d edeteteterermrmmininiene ea a am m meeaeasasusururere eo o fof tf t hthehe er r isrisikskk ICICIC ininivnvovolovlvleveded.d .T .T Thhehe ea a uautuhthtohororsrs hs h ahavaveve ed d edesesigsigingneneded dt ht htehe et et etxextx tt tot ot oa a sassssissistis ti tni nidndidviviivdidiuduaualasls lts ot ot op p rprerepepapararere et ot ot os su sucuccccecesessssfsufuflullyllyl yc c ocomommpplpelelteetet et ht htehee S AS AS A eececoconononomommiciciscs ps p oporortritoitoinonsns os o fo ft fht htehe eF F uFunundndadamammeenentnatatlasls los o fo fE fE Enngngigninieneeeererinrinigng gE E Exxaxamamm... NNN DDD DDDaaavvviiiddd W WWhhhiiitttmmmaaannn D D D EEE CCC ISIOISIOISIO RRRooonnnaaalldldd E EE.. .T T Teeerrrrrryyy NNN A A A NNN AAA LLL YYY SSS ISISIS AAAbbbooouuuttt S S YSYYNNNTTTHHHEEESSISIsIss TTThhihsis ivs v ovoloululmummee ei si s ias a ap p rprinrinitnetetded dv v everersrsiosioinon no o fo fa fa aw w woororkrk kt ht htahata ta ta pappppepeaeararsrs is ni ni nt ht htehe eS S ySynyntnhthteheseississis DDDigigiigtiatiatla lL lL iLbibirbrarararyry oy of o fE fE Enngngigninieneeeererirninigng ga a nandnd dC C Coomommppuputuetetrer Sr S cSiceiceinencnecec. e.S .S ySynyntnhthtehesesissis iLs L Leecectcututruerersess MMM ooo pprpororvovidvidiede ce co cononcncisciesies, e,o ,o roirgirgiigninianal alp lp rpererseesesnentnatattaitoitoinonsn so so fo fi fmi mimppoporotratratnantn tr ter erseesesaearacrcrhch ha an andnd dd d edeveveveloelolpopmpmmeenentntt rrr ggg tototpopipcicsics, s,p ,p upubublbilsilshisheheded dq q uquiucickicklkyly,l y,i n,i ni nd d idgigiigtiatiatl ala lan andnd dp p rprinrinitn tf tof ofromrmrmaatasts.t s.F .F oForo rm rm mooroerer ie ni nifnofofromrmrmaataitoitoinonn aaa vvivsisiitsi tiw tw wwwwww.wm.m.moororgrgaganancnclcalalyaypypopoooolo.lc.lc.ocomomm nnn &&& CCC MMMooorrrgggaaannn & & & C CClllaaayyypppoooooolll P PPuuubbbllliisisshhheeerrrsss IISISBSBNBN:N: : 9 9797878-8-1-1-1-6-60608084845495-950-980-8006806400640-040-06-066 lalala SSSYYYNNNTTTHHHEEESSSIIISSS L LLEEECCCTTTUUURRREEESSS O OONNN E EENNNGGGIIINNNEEEEEERRRIIINNNGGG yyy ppp wwwwwwwww..m.mmooorrgrggaaannncccllalaayyypppooooooll.l.c.cocoommm ooo 999778781816160608088445458586864646466 ooo lll SSSttetevevevenenn F F .F .B .B Baararrrreretetttt, t,S ,S eSereririeieses sE E Eddidititotororr Fundamentals of Engineering Economics and Decision Analysis Synthesis Lectures on Engineering Editor StevenS.Barrett,UniversityofWyoming FundamentalsofEngineeringEconomicsandDecisionAnalysis DavidL.WhitmanandRonaldE.Terry 2012 ALittleBookonTeaching:ABeginner’sGuideforEducatorsofEngineeringandApplied Science StevenF.Barrett 2012 EngineeringThermodynamicsand21stCenturyEnergyProblems:ATextbookCompanion forStudentEngagement DonnaRiley 2011 MATLABforEngineeringandtheLifeSciences JosephV.Tranquillo 2011 SystemsEngineering:BuildingSuccessfulSystems HowardEisner 2011 FinShapeThermalOptimizationUsingBejan’sConstructalTheory GiulioLorenzini,SimoneMoretti,andAlessandraConti 2011 GeometricProgrammingforDesignandCostOptimization(withillustrativecasestudy problemsandsolutions),SecondEdition RobertC.Creese 2010 SurviveandThrive:AGuideforUntenuredFaculty WendyC.Crone 2010 iii GeometricProgrammingforDesignandCostOptimization(withIllustrativeCaseStudy ProblemsandSolutions) RobertC.Creese 2009 StyleandEthicsofCommunicationinScienceandEngineering JayD.HumphreyandJeffreyW.Holmes 2008 IntroductiontoEngineering:AStarter’sGuidewithHands-OnAnalogMultimedia Explorations LinaJ.KaramandNajiMounsef 2008 IntroductiontoEngineering:AStarter’sGuidewithHands-OnDigitalMultimediaand RoboticsExplorations LinaJ.KaramandNajiMounsef 2008 CAD/CAMofSculpturedSurfacesonMulti-AxisNCMachine:TheDG/K-Based Approach StephenP.Radzevich 2008 TensorPropertiesofSolids,PartTwo:TransportPropertiesofSolids RichardF.Tinder 2007 TensorPropertiesofSolids,PartOne:EquilibriumTensorPropertiesofSolids RichardF.Tinder 2007 EssentialsofAppliedMathematicsforScientistsandEngineers RobertG.Watts 2007 ProjectManagementforEngineeringDesign CharlesLessardandJosephLessard 2007 RelativisticFlightMechanicsandSpaceTravel RichardF.Tinder 2006 Copyright© 2012byMorgan&Claypool Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmittedin anyformorbyanymeans—electronic,mechanical,photocopy,recording,oranyotherexceptforbriefquotationsin printedreviews,withoutthepriorpermissionofthepublisher. FundamentalsofEngineeringEconomicsandDecisionAnalysis DavidL.WhitmanandRonaldE.Terry www.morganclaypool.com ISBN:9781608458646 paperback ISBN:9781608458653 ebook DOI10.2200/S00410ED1V01Y201203ENG018 APublicationintheMorgan&ClaypoolPublishersseries SYNTHESISLECTURESONENGINEERING Lecture#18 SeriesEditor:StevenS.Barrett,UniversityofWyoming SeriesISSN SynthesisLecturesonEngineering Print1939-5221 Electronic1939-523X Fundamentals of Engineering Economics and Decision Analysis David L.Whitman UniversityofWyoming Ronald E.Terry BrighamYoungUniversity SYNTHESISLECTURESONENGINEERING#18 M &C Morgan &cLaypool publishers ABSTRACT Theauthorscovertwogeneraltopics:basicengineeringeconomicsandriskanalysisinthistext. Within the topic of engineering economics are discussions on the time value of money and interestrelationships.Theseinterestrelationshipsareusedtodefinecertainprojectcriteriathatare usedbyengineersandprojectmanagerstoselectthebesteconomicchoiceamongseveralalternatives. Projects examined will include both income- and service-producing investments. The effects of escalation,inflation,andtaxesontheeconomicanalysisofalternativesarediscussed.Riskanalysis incorporatestheconceptsofprobabilityandstatisticsintheevaluationofalternatives.Thisallows managementtodeterminetheprobabilityofsuccessorfailureoftheproject.Twotypesofsensitivity analysesarepresented.Thefirstisreferredtoastherangeapproachwhilethesecondusesprobabilistic conceptstodetermineameasureoftheriskinvolved.Theauthorshavedesignedthetexttoassist individuals to prepare to successfully complete the economics portions of the Fundamentals of EngineeringExam. KEYWORDS engineeringeconomics,timevalueofmoney,netpresentvalue,internalrateofreturn, cashflowanalysis,probability,statistics,riskanalysis vii To our parents,wives,children,and grandchildren with much love and gratitude for everything.
The list of books you might like
