THE UNIVERSITY OF
NEW SOUTH WALES
SCHOOL OF MECHANICAL AND
MANUFACTURING ENGINEERING
GSOE 9830
ECONOMIC DECISION ANALYSIS
IN ENGINEERING
SEMESTER 2
2013
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Contents
Page
Course staff
Course details
Course aims
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Student learning outcomes
Teaching strategies
Assessment
Academic honesty and plagiarism
Course schedule
Resources for students
Course evaluation and development
Administrative Matters
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COURSE STAFF:
Course Coordinator
Dr M Hasan
School of Mechanical Engineering
m.hasan@unsw.edu.au 02-9385-5692
Lecturer/s
Dr M Hasan
School of Mechanical Engineering
m.hasan@unsw.edu.au 02-9385-5692
Guy Allinson
School of Petroleum Engineering Building
g.allinson@unsw.edu.au 02-9385-5189
COURSE INFORMATION
The course consists of two sections:
Section 1 (Week 1-6) : Dr Maruf Hasan
Section 2 (Week 7-12): Guy Allinson
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This is a 6 unit-of-credit (UoC) course, and involves 3 hours per week of lectures,
tutorials and group discussion.
For this course you are expected to put in at least six hours per week of additional time in
order to obtain a good grade.
COURSE AIMS
The objective of the course is to provide engineers and managers with the knowledge of
principles, basic concepts and methodology of economic decision analysis. This will
assist the students to develop proficiency with the methods and with the process for
making rational decision they are likely to encounter in professional practice.
STUDENT LEARNING OUTCOMES
By successfully completing Section1 of the course, the student should be able to:
1. apply the knowledge of systematic evaluation of the costs and benefits of
proposed technical and business project and ventures.
2. identify what is needed to perform an engineering economy study.
3. understand cost concepts, cash flows, their estimation and interest formulae.
4. be familiar with various methods for economy studies and comparing
alternative investments.
5. understand various depreciation methods and learn about the effect of income
tax on economy studies.
6. understand and calculate the effects of inflation in economic analysis.
7. use spreadsheet functions to solve engineering economy problems.
Section 2 of the course aims to help students understand:
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the role of probability analysis in decision making.
decision tree analysis.
how to value information.
how to carry our Monte Carlo simulations
how to analyse a portfolio of investments
TEACHING STRATEGIES
Readings and lectures will be used to introduce and explain the theoretical
foundations of various economic analysis principles. Tutorial exercises will be used
to apply and reinforce the understanding of the concepts and how they can be applied
to solve problems encountered in the real world. Student are expected to complete the
assigned readings prior to lectures so that they can contribute to class discussions.
Students will be required to form groups to discuss and solve the case study and
assignment problems.
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ASSESSMENT
Section 1(contributes 50% to the overall mark)
Assessment Task
Weighting
Assignments (Handed out Wk4 due Wk7)
Class Test (Wk 5)
Final Exam
5%
15%
30%
Section 2(contributes 50% to the overall mark)
There will be a test during weeks 7 to 12. This will have a weight of 15% of the
marks for the whole course. We will announce the date for the test during the first
few weeks of the session.
The questions in the final exam for Section 2 of the course have a weight of 35% of
the marks for the whole course.
The final examination for the course is a written formal examination and will include
material covered in the whole course.
Calculators
You will need to provide your own calculator, of a make and model approved by
UNSW, for the examination. The list of approved calculators is shown at
https://my.unsw.edu.au/student/academiclife/assessment/examinations/calculato
r.html
It is your responsibility to ensure that your calculator is of an approved make and
model, and to obtain an “Approved” sticker for it from the School Office or the
Engineering Student Centre prior to the examination. Calculators not bearing an
“Approved” sticker will not be allowed into the examination room.
Special Consideration and Supplementary Assessment
For details of applying for special consideration and conditions for the award of
supplementary assessment, see Administrative Matters for All Courses, available
from the School office as part of The Guide, or on the School website.
ACADEMIC HONESTY AND PLAGIARISM
What is Plagiarism?
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Plagiarism is the presentation of the thoughts or work of another as one’s own.*
Examples include:
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direct duplication of the thoughts or work of another, including by copying
material, ideas or concepts from a book, article, report or other written
document (whether published or unpublished), composition, artwork, design,
drawing, circuitry, computer program or software, web site, Internet, other
electronic resource, or another person’s assignment without appropriate
acknowledgement;
paraphrasing another person’s work with very minor changes keeping the
meaning, form and/or progression of ideas of the original;
piecing together sections of the work of others into a new whole;
presenting an assessment item as independent work when it has been
produced in whole or part in collusion with other people, for example, another
student or a tutor; and
claiming credit for a proportion a work contributed to a group assessment item
that is greater than that actually contributed.†
For the purposes of this policy, submitting an assessment item that has already
been submitted for academic credit elsewhere may be considered plagiarism.
Knowingly permitting your work to be copied by another student may also be
considered to be plagiarism.
Note that an assessment item produced in oral, not written, form, or involving live
presentation, may similarly contain plagiarised material.
The inclusion of the thoughts or work of another with attribution appropriate to the
academic discipline does not amount to plagiarism.
The Learning Centre website is main repository for resources for staff and
students on plagiarism and academic honesty. These resources can be located
via:
www.lc.unsw.edu.au/plagiarism
The Learning Centre also provides substantial educational written materials,
workshops, and tutorials to aid students, for example, in:
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correct referencing practices;
paraphrasing, summarising, essay writing, and time management;
appropriate use of, and attribution for, a range of materials including text,
images, formulae and concepts.
Individual assistance is available on request from The Learning Centre.
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Students are also reminded that careful time management is an important part of
study and one of the identified causes of plagiarism is poor time management.
Students should allow sufficient time for research, drafting, and the proper
referencing of sources in preparing all assessment items.
* Based on that proposed to the University of Newcastle by the St James Ethics Centre.
Used with kind permission from
the University of Newcastle
† Adapted with kind permission from the University of Melbourne.
COURSE SCHEDULE
Section 1 (Week 1-6)
Week Date Topic
1
30/07 Engineering
economic decisions,
cost concepts, time
value of money,
interest formulae
06/08 Present
worth(NPV)analysis,
future worth, annual
worth
13/08 Internal rate of
return, payback
period method
20/08 Comparing
alternative
investments
27/04 Mid-semester Break
27/08 Depreciation
methods;
03/09 Income taxes
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3
4
5
6
Text
Tutorial exercises
reference
1,4
4.1,5,6,8,31,34,57,
58,60,66,68,70,72,73,77,79,80,81,82,85,91,103,
107,
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5.2,4,21,23,24,27,32
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5. 44,45,49,53,54,60,63,67,67
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6.2,4,12,13,15,19,28,29,35,37,41,45,52,56,57,67,70
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7.7,8,11,12,14
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7,23,32,38,39,40,41,42,47,55,60
Section 2 (Week 7-12)
Week
Date
Topic
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10/09
Limitations of sensitivity analysis
Using probability distributions
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17/09
Exploration decisions
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24/09
Binomial distributions
1/10 (Mid-Session Break)
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08/10
Decision trees
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11
15/10
Value of information
12
22/10
Monte Carlo simulation
Portfolio analysis
Course revision (Week 13)
13
29/10
Course Revision
We reserve the right to change lecturers and topics depending on the availability of the
lecturers and the progress of the course
RESOURCES
Text book 1
W.G. Sullivan, E.M. Wicks, C.P. Koelling, “Engineering Economy”, Prentice Hall
International, 15th Ed., 2012.
The textbook is available for purchase at the UNSW book shop. Lecture outlines will be
provided on Blackboard/Moodle.
Textbook 2 (optional)
Decision Analysis for Petroleum Exploration
Paul Newendorp and John Schuyler
Planning Press 2000
Course notes for the Section 2 of the course are provided on Blackboard/Moodle.
CONTINUAL COURSE IMPROVEMENT
Periodically student evaluative feedback on the course is gathered, using among other
means, UNSW's Course and Teaching Evaluation and Improvement (CATEI) process.
Student feedback is taken seriously, and continual improvements are made to the course
based in part on such feedback.
ADMINISTRATIVE MATTERS
Information about each of the following matters is presented in a School handout,
Administrative Matters for All Courses, available from the School website
www.mech.unsw.edu.au/sites/default/files/AdminMatters.pdf
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It is essential that you obtain a copy, read it carefully and become familiar with the
information, because it applies to this course and to each of the other courses in which
you are enrolled.
Expectations of students (including attendance at lectures and tutorials/laboratory
classes/seminars; and computer use, for example, in the use of email and online
discussion forums)
Procedures for submission of assignments and the School’s policy concerning late
submission
Information on relevant Occupational Health and Safety policies and expectations:
: www.ohs.unsw.edu.au
Examination procedures and advice concerning illness or misadventure
Equity and disability
Students who have a disability that requires some adjustment in their teaching or learning
environment are encouraged to discuss their study needs with the course convener prior
to, or at the commencement of, their course, or with the Equity Officer (Disability) in the
Equity and Diversity Unit (SEADU) by phone on 9385 4734, email seadu@unsw.edu.au
or via the website www.studentequity.unsw.edu.au/content/default.cfm?ss=0. Issues to be
discussed may include access to materials, signers or note-takers, the provision of
services and additional exam and assessment arrangements. Early notification is essential
to enable any necessary adjustments to be made.
M Hasan and Guy Allinson
July 2013
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