Engineering Economics and Evaluation for Decision Excellence

Engineering economics is the backbone of sound decision-making in engineering projects, enabling professionals to evaluate alternatives, optimize resource allocation, and maximize value. This course provides a comprehensive understanding of economic principles and evaluation techniques tailored to engineering applications. Through a blend of theoretical concepts, practical tools, and real-world case studies, participants will learn how to analyze costs, benefits, risks, and uncertainties to make informed decisions that align with organizational goals.

Audience

This course is designed for:

Engineers and technical professionals involved in project planning and decision-making.
Project managers seeking to enhance their financial and economic evaluation skills.
Consultants and analysts working on feasibility studies or cost-benefit analyses.
Graduates or early-career professionals aiming to specialize in engineering economics.

Course objectives

Upon completion of the course, participants will acquire:

Understand the fundamental principles of engineering economics and their application in decision-making.
Develop proficiency in evaluating cash flows, time value of money, and investment alternatives.
Learn to conduct cost-benefit analyses, life-cycle costing, and risk assessments.
Gain hands-on experience using economic evaluation tools such as NPV, IRR, and payback period.
Be able to integrate sustainability and innovation into economic evaluations.
Apply learned concepts to solve real-world problems through case studies and simulations.

Course contents

Day–1: Foundations of Engineering Economics

Introduction to Engineering Economics – Importance, decision-making role, and key financial terms.
Time Value of Money – Present vs. future value, simple vs. compound interest, and cash flow diagrams.
Economic Decision-Making – How ignoring time value affects choices.
Case Study & Discussion – Loan repayment evaluation and financial impact analysis.
Quiz – Calculating present and future values.

Day–2: Economic Evaluation Tools

Net Present Value (NPV) & Internal Rate of Return (IRR) – Importance, calculation, and comparison.
Payback Period & Benefit-Cost Ratio – When and how to apply each metric for decision-making.
Project Financial Evaluation – Selecting the right economic tool based on project conditions.
Workshops & Tutorials – Hands-on calculations for NPV, IRR, payback period, and benefit-cost ratio.
Group Activity – Ranking investment alternatives using financial metrics.

Day–3: Cost Estimation and Life-Cycle Costing

Types of Costs – Fixed vs. variable, direct vs. indirect, sunk, and opportunity costs.
Life-Cycle Costing (LCC) – Long-term financial decision-making and cost integration.
Economic Impact Analysis – Maintenance and operational cost considerations.
Hands-On Exercise – Estimating costs for small-scale projects.
Case Study & Quiz – Applying LCC to equipment selection and identifying cost implications.

Day–4: Risk and Uncertainty Analysis

Sensitivity Analysis – Understanding financial risk and how variables impact decisions.
Probabilistic Analysis & Decision Trees – Modeling uncertainty and calculating expected monetary value (EMV).
Risk Management Strategies – Tools for handling uncertainty in large projects.
Case Study & Group Discussion – Evaluating investment decisions under uncertainty.
Quiz – Constructing decision trees and performing EMV calculations.

Day–5: Sustainability and Final Assessment

Sustainability in Economics – Integrating environmental and social factors into financial evaluations.
Triple Bottom Line (TBL) Approach – Considering people, planet, and profit in decision-making.
Course Recap & Lessons Learned – Reviewing key concepts and common economic evaluation pitfalls.
Final Assessment – Written test covering all topics.
Wrap-Up & Certification – Course feedback session and certificate distribution.

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