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. |
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 |
| Midterm Examinations (including preparation) | 3 | 0 | 0 |
| Other Applications | 6 | 1 | 6 |
| Thesis/ Project | 12 | 0 | 0 |
| Total Workload | 118 | ||
| Total Workload / 25 | 4.72 | ||
| Credits ECTS | 5 | ||