To familiarize students with the concepts of economics and their application in chemical engineering design for the purpose of cost estimation and profitability analysis.
Engineering economy basics: Measures of financial effectiveness; Non-monetary factors and multiple objectives; principles of engineering economy.
Consumer and producer goods; Measures of economic worth; Price, Supply and Demand relationship; Production; Factors of production; Laws of return.
Sunk and opportunity costs; Fixed, variable, and incremental costs; Recurring and nonrecurring costs; Direct, indirect, and overhead costs; Standard costs; Breakeven analysis; Unit cost of production; Cost-benefit analysis; Feasibility studies; Value analysis in designing and purchasing.
Islamic and Contemporary financing systems and their use in cost estimation. Depreciation accounting.
Economic evaluation of processes and equipment; Payback period method; Present worth method; Uniform annual cost method; Rate of return method.
Manufacturing lead time; Production rate; Capacity; Utilization; Availability; Work in process; WIP and TIP ratios.
Types of ownership; types of stock; Partnership & joint stock companies; Banking and specialized credit institutions.
Text and references:
Leland Blank, and Anthony Tarquin, “Engineering Economy”, 6th Edition, McGraw-Hill, 2005.
J. Thuesen, and W. J. Fabrycky, “Engineering Economy”, 9th Edition, Prentice Hall of India, 2005.
Ted G. Eschenbach, “Engineering Economy”, 2nd Edition, Oxford University Press, 2003.
James L. Riggs, David D. Bedworth, and Sabah U. Randhawa, ”Engineering Economics”, 4th Edition, Tata McGraw-Hill, 1996.
James L. Riggs, and Thomas M. West, “Essentials of Engineering Economics”, 2nd Edition, McGraw-Hill, 1986