Engineering 361
Engineering Economics
© Dr. B. C. Paul, 2001
Revised 2008
Why Am I Here? Top
Reasons
 I have a natural love for the subject
 I heard a really good instructor was teaching the
course
 I like skipping my meal to feast on intellectual
stimulation
 I love the punishment and pressure (I also slam my
hand in the car door for fun)
 My department requires this course and I want to get
out of here and make some money
 The class is about money and how to get more of it –
Whats not to like?
Why Your Department
Requires it
 Your degree teaches you how to design things
 Building them costs money
 People Build Things Because They Make
Money
 The difference between a paper decoration
and a project may come down to whether you
can show it will make money
Another Reason
 Taking Care of #1
 Personal Investments involve making money
 Credit cards, loans and mortgages all require
paying extra money
 Choosing ways of meeting needs have both
extra costs and cost savings
 Understanding how money and interest works
helps you to keep more of the green for
yourself
How will I be Graded?
 Grading will be based on points earned
 Points come from Homework (about 23
problems) and Two Tests
 Each Test will be 25% of the grade (50%
total for tests)
 Homeworks will be equally weighted and
the average score will be 50% of the
grade
What Will You Do With the
Points?
 Grading will be on a strictly % basis
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90% + = A
80% + = B
70% + = C
60% + = D
<60% - You'll get to enjoy my course again
in the fall
What Kind of Tests Do You
Give?
 Tests are open book open notes
 If you can hook to internet you can use that
 If you want to bring a computer or financial calculator you can
use that
 You cannot use another person in any form
 Usually about 2 problems
 Often similar to homework (another reason to do your
homework)
 May have multiple problems with you picking what to do
 Don’t give you a do them all and take grade on best
 Old Test Archives on the Web lets you look at previous
tests
 I also have often posted practice tests.
More on Tests
 In general tests are time intensive
 If don’t already have an idea what the
answer is
 If your trying to do research during the test
 Your probably a sunk monkey
Homework
 Homework is intended as an application
exercise for class
 Get your hands on the problem or procedure
 Working in groups is acceptable
 Sometimes learning from your peers or being the
teacher for a while is best way to learn
 Everyone must turn in an individual assignment
 Just copying the work of others is not
acceptable
Homework Timing
 Most homework can be done in 20 minutes or
less
 If it is taking you more you have probably become
lost (might be good to consult a friend or the
instructor)
 Warning on Wait till 30 minutes before class
approach
 Often are best able to do homework right after
learning about how – not waiting several days
 If something goes wrong you won’t make it
Textbook
 Don’t require a textbook
 Makes class attendance more critical
 Some People Learn Best from Reading or Alternate
Perspectives
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Engineering Economic Analysis
Donald G. Newnan, Jerome P. Lavelle, Ted G. Eschenbach
(8th Addition)
Or Essentials of Engineering Economic Analysis
Donald G. Newnan, Jerome P. Lavelle, Ted G. Eschenbach
(2nd Addition)
Two books are same for chapters covered
 Portions of these books are available on-line
Comments on Learning
Resources
 Resources Available
 Class Lectures (attending class)
 Doing Problems
 Class Website
Class Attendance
 In general this is #1 correlation with A students
 Professors are most likely to test what they teach
 If its on their mind when their lecturing its likely to be on their
mind when they test
 My class is designed to emphasize lecture heavily
 Material found only in the text book isn’t going to be on the test
 My approach to subject differs from the book
 Uses a lot of examples to illustrate
 Uses a lot of intuitive logic as opposed to proofs and derivations
Doing Problems
 Given a series of assigned problems
 Most assignments are a single problem
 Purpose is to give you hands on experience
practicing something covered in lecture
 An issue of Balance
 Tried to keep modest reasonable workload for 2
credit class
 Problem
 Some people learn by repeatedly doing
 Not enough homework problems to beat it into
your skull
 Can do supplemental problems from book
Class Website
 Web site has copies of all lecture notes
posted
 Some print out and take notes beside
 Warning – some feel easy access to notes
removes need to attend class
 Not enough text on power point slides to teach
everything
www.engr.siu.edu
Enter
www.engr.siu.edu
This brings up the
College Web Site
By the time I show you how to get there you’ll be ready to
Book Mark
Pull Out the Best Department
Mining Engineering
Web page.
From the Departmental
Page
Select Faculty and
Staff
From the Faculty and Staff
Page Click the Coolest
Faculty Member
Which is Me
Of Course!
(Dr. Bradley C Paul)
Next Go to the Course
Materials
Select Courses
This ones
Good looking
Because of Copyrighted
Materials the Site is
Password Protected to
Ensure Academic Fair Use
This is tough
Your User Name is
CurrentStudent
Your Password is
Senior Design 460
I Know All that Digging Was Fun But
You May Want to Consider
Bookmarking this as a Favorite (ok
at least for now)
Has lists of class
Times, room numbers
Contact information
Also has a Reading
Room.
Reading Room Has an Area
for Engineering Economics
Has Books, and IRS
Publications
Ok it also has your
Textbook
Well – At Least the Part
We Cover
Files will download
As PDF
(Means you need
Adobe Acrobat on
Your computer –
It’s a free program)
Has Problems from Textbook
Available (if you need drilling
practice)
Also has the Interest
Formulas and Tables
(relax if you don’t
Know what they are
Right now)
Has specific readings
For each lecture
(if you want to do
Supplemental reading)
The Class Website
 The textbook
 The textbook or parts covered are available online
as PDF files
 Can read book anywhere you have access
 Do I need to buy the text
 Tried to design so that you don’t have to spend your
money
 If you don’t buy you won’t have the resource
 Future reference
 May not always have web access during test – tests are
open book but have to have the book
Back to the Introductory
Page
Scrolling Down We See
Supplemental Class Resources
Now We Are In the Area to
Find Those Course Notes
Hey!! Here’s
Our Course
Woo – I Think We Have
Something
One Feature is
Called Where We
Are
Features of Where We Are
It tells you what lecture we are on.
You can track when assignments are
Posted and due (in case your not sure
Whether you went to sleep during class)
Key Announcements cover things like upcoming
tests
Tips can give
Answers to
Problems I find
Coming up.
The Coordinated Class
Schedule List
Whats on the Coordinated
Schedule?
Links to the Lecture
Slides
Woo – Where Have I Seen
This Before
What Else is There
You Can See if There
Was an assignment
Issued with a lecture
You can pull up
Selected reading for
The lectures
Reading Assignments in
Adobe PDF
What If I Pick One of
Those Assignments
The Assignment Page
Gives Issue and Due
Dates
Tells about whether
Is has been turned
In or graded
Wouldn’t be complete if it didn’t give you the assignment
Has all the usual Syllabus
Stuff
Here
Note that you were not
Given a paper
Syllabus because its
All on-line.
Can Track Assignments
from Here Also
One of the Features Under
Tests
The Old Test
Archives
Links to Previous Tests
Some With and Some
Without a Key
The Class Website
 Old Test Archives
 Can get copies of old tests, often with the answer
keys
 Helpful for seeing what kind of questions the
professor asks
 May take the test and then use key to
evaluate your answer
 In general I discourage the look at question – look
at answer and say “Oh I know that method”
The Topical Outline
Topical Outline
Also Leads to Course
Notes
Shows the Class All
Divided into Major Units
Shows Each Topical Area
in the Units
Material for Each Topic
Lecture notes
Either in Power
Point or HTML
(for those without
Power point or a
Reader)
Some lectures
Have a Realplayer
Audio lecture
Links to Reading
Assignments or
Assignments if
applicable
So Whats Under That
Resources Tab?
The Resources Page
The Formulas for Discount Factors
Key Chapters from the Textbook
Extra Homework Problems (for those who need to beat it in)
Materials Pertaining to Tax Law
More Resources Stuff
Quick Review of the Course the way I organize it
Useful Spreadsheets
Whats Useful About
Them?
Class Assistant Does All the
Basic Types of Calculations
Needed for this class
Nice Alternative to
Buying a special
Calculator or a lot
Of time doing math
Other Spreadsheets
Spreadsheet to help estimate home ownership
Costs and different ways of financing it
One comparing money from different types of loans
And credit cards.