Engineering economics textbook
The effective functioning of a business organization will enable it to provide goods/services at a lower price. In the process of managing organisations, managers at various levels have to take appropriate economic decisions which will help in reducing investment, operation and maintenance expenses along with increasing revenue, savings and other gains for the organization.
This can be achieved through engineering economics which deals with methods that enable one to make economic decisions to minimize costs and/or maximize benefits to business organisations.
This book on engineering economics is the outgrowth of many years spent teaching postgraduate courses in industrial and production engineering and a year teaching water resource management (all at Anna University, Chennai).
It is intended as a text for these disciplines. It can also be used as a text for undergraduate engineering courses and as a reference for management (project management) and commerce (financial management) courses. Besides, professional engineers and project consultants who analyze economic decisions will also find the book useful.
I have attempted not only to provide a comprehensive coverage of various aspects of engineering economic analysis but I have provided a comprehensive appendix of interest tables for a wide range of interest rates (0.25-50%) and period ranging from 1 year to 100 years. I believe that these tables, along with the topics discussed, will assist students and teachers in doing economic analysis and problem solving.
The book contains about 100 well-structured examples made to illustrate the concepts illustrated. Each chapter also contains a set of questions and problems to test the student’s ability to understand the topics. I would like to thank Prof. Dr. K. Balasubramanian, former chair of the Department of Industrial Engineering at Anna University, who gave me the opportunity to teach this subject for an Industrial Engineering class at M.E. continuously for seven years while I was there as a faculty member.
This enabled me to enrich my knowledge and experience on this subject. Many of my academic colleagues and friends have helped me by giving valuable suggestions on the structure and content of this text, and these suggestions have been instrumental in improving the quality and presentation of this book. I would like to express my deep gratitude and appreciation to all of them
Economics is the science that deals with the production and consumption of goods and services and the distribution and rendering of these for human welfare.
The following are the economic goals. A high level of employment
An equitable distribution of income Growth
Some of the above goals are interdependent. The economic goals are not always complementary; in many cases they are in conflict. For example, any move to have a significant reduction in unemployment will lead to an increase in inflation.