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The Treatment of Engineering Economy in Other Engineering Texts

Abstract

This paper looks at how engineering economy subjects are treated in non-engineering-economy texts. Over the years, the author of this paper has taught an eclectic variety of both engineering and non-engineering courses and has often been surprised by the treatment of engineering economy in the texts used in these courses. When asked to review an otherwise good text in cost estimation, this author was surprised by the treatment of one engineering economy topic in an area so essential to the development of the inputs to the economic analysis at the core of engineering economy. This paper discusses these treatments and their implications for the engineering economy discipline.

Introduction

The intent of this paper is not to point fingers at specific authors for their treatment of engineering economy topics. The intent is to start a discussion of what the discipline needs to do to encourage better treatment of these topics in order that students have a better appreciation of the how to apply engineering economy in the practice of engineering. The idea for this paper has been a long time in bubbling up to the surface. The author has been involved in project analysis and justifications since graduating with a BIE degree in 1970. Since 1993, the author has been teaching engineering economy on a regular basis in a variety of programs and for a variety of audiences at both the undergraduate and graduate level. During this time the author of this paper list 58 different courses on his cv in programs as diverse as industrial engineering, engineering management, manufacturing engineering, industrial management, and technology management.

During the past thirteen years, the author has regularly attended the annual ASEE conferences and attended countless sessions. These sessions have been eye-opening and thought provoking and well worth the time to attend. At the same time it has educated this author to the wide range of thought on many subjects. In one session, a presenter explained how he taught students to reduce lot sizes using the economic order quantity (EOQ) equations – he instructed the students to keep raising the inventory carrying cost until the lot size was the desired size of one. In another session one of the presenters explained how he had students work with companies to evaluate projects using a technique which went against the key concepts of engineering economy – a copy of the handout from this presentation is on this author’s self as a precautionary artifact. These two examples are part of the reason for the current policy in several divisions of ASEE – including the two divisions where these sessions occurred – that there must be a peer reviewed paper accepted before the presentation is allowed. Having reviewed papers for the engineering economy, this author will claim that it has paid dividends – such as the paper on teaching economics (macro or micro) to engineers which the paper’s authors thought was the same as engineering economics.

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Peterson, W. (2008, June), The Treatment Of Engineering Economy In Other Engineering Texts Paper presented at 2008 Annual Conference & Exposition, Pittsburgh, Pennsylvania. 10.18260/1-2--4274