Master of Science in Industrial Engineering

Advanced Engineering Economy(IND 511)

Course Code Course Name Semester Theory Practice Lab Credit ECTS
IND 511 Advanced Engineering Economy 1 3 0 0 3 6
Prerequisites
Admission Requirements
Language of Instruction English
Course Type Compulsory
Course Level Masters Degree
Course Instructor(s) E. Ertuğrul KARSAK ekarsak@gsu.edu.tr (Email)
Assistant
Objective
Content - Introduction and organization
- Review of discrete cash flow models
- Uniform and gradient series
- Nominal versus effective interest rates
- Continuous compounding and continuous cash flows
- Mid-period convention
- Time-dependent interest rates
- Loans
- Laplace, Z and Mellin transforms in cash flow modeling
- Equivalent methods for comparing alternatives (single project)
- Present worth, future worth and annual worth methods
- Benefit-cost ratio method
- Rate of return method and variations
- Internal rate of return method
- External rate of return method
- Decision rules for selecting among multiple alternatives
- Present worth, future worth and annual worth methods
- Benefit-cost ratio method
- Internal rate of return method
- Approximate and supplementary methods
- Payback method
- Profitability index
- Depreciation methods
- After-tax economy studies
- Index numbers
- Incorporating inflation into economic analysis
- Replacement models
- Retirement with identical replacement
- Generalized replacement model
- Dynamic programming formulations
- Mathematical programming formulations for capital budgeting
- Risk analysis
- Statistical moments of random variables
- Random cash flows
- Random project life
- Decision criteria and methods for risk and uncertainty
- Fuzzy discounted cash flow analysis
- Introduction to real options approach
Course Learning Outcomes LO 1: Cash flow models.
LO 2: Effects of inflation on economic analysis.
LO 3: Replacement models.
LO 4: Mathematical programming formulations for capital budgeting.
LO 5: Decision criteria and methods for risk and uncertainty
LO 6: Multi-attribute and multi-objective decision making for investment analysis.
LO 7: Fuzzy cash flow analysis.
Teaching and Learning Methods Lecture; problem sessions; discussion; self study.
References - Park, C.S., Sharp-Bette, G.P., Advanced Engineering Economics, John Wiley & Sons, 1990.
- Fleischer, G.A., Introduction to Engineering Economy, PWS Publishing Company, Boston, 1994.
Print the course contents
Theory Topics
Week Weekly Contents
1 Introduction and organization, Review of discrete cash flow models, Uniform and gradient series, Nominal versus effective interest rates.
2 Continuous compounding and continuous cash flows, Mid-period convention, Time-dependent interest rates, Loans, Laplace, Z and Mellin transforms in cash flow modeling.
3 Equivalent methods for comparing alternatives (single project), Present worth, future worth and annual worth methods, Benefit-cost ratio method, Rate of return method and variations, Internal rate of return method, External rate of return method.
4 Decision rules for selecting among multiple alternatives, Present worth, future worth and annual worth methods, Benefit-cost ratio method, Internal rate of return method, Approximate and supplementary methods, Payback method, Profitability index.
5 Depreciation methods, After-tax economy studies.
6 Index numbers, Incorporating inflation into economic analysis.
7 Replacement models, Retirement with identical replacement, Generalized replacement model, Dynamic programming formulations.
8 Mathematical programming formulations for capital budgeting.
9 Midterm
10 Risk analysis, Statistical moments of random variables, Random cash flows, Random project life.
11 Decision criteria and methods for risk and uncertainty.
12 Fuzzy discounted cash flow analysis.
13 Introduction to real options approach.
14 Project presentations.
Practice Topics
Week Weekly Contents
Contribution to Overall Grade
  Number Contribution
Contribution of in-term studies to overall grade 2 50
Contribution of final exam to overall grade 1 50
Toplam 3 100
In-Term Studies
  Number Contribution
Assignments 0 0
Presentation 0 0
Midterm Examinations (including preparation) 1 30
Project 1 20
Laboratory 0 0
Other Applications 0 0
Quiz 0 0
Term Paper/ Project 0 0
Portfolio Study 0 0
Reports 0 0
Learning Diary 0 0
Thesis/ Project 0 0
Seminar 0 0
Other 0 0
Toplam 2 50
No Program Learning Outcomes Contribution
1 2 3 4 5
1 X
2 X
3 X
4 X
5 X
6 X
7 X
8 X
9 X
10 X
11 X
12 X
Activities Number Period Total Workload
Class Hours 14 3 42
Working Hours out of Class 14 5 70
Assignments 0 0 0
Presentation 0 0 0
Midterm Examinations (including preparation) 3 0 0
Project 0 0 0
Laboratory 0 0 0
Other Applications 6 1 6
Final Examinations (including preparation) 0 0 0
Quiz 0 0 0
Term Paper/ Project 0 0 0
Portfolio Study 0 0 0
Reports 0 0 0
Learning Diary 0 0 0
Thesis/ Project 12 0 0
Seminar 0 0 0
Other 0 0 0
Total Workload 118
Total Workload / 25 4,72
Credits ECTS 5
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