CEBU INSTITUTE OF TECHNOLOGY – UNIVERSITY

N. Bacalso Avenue, Cebu City, Philippines

COLLEGE OF ENGINEERING & ARCHITECTURE

DEPARTMENT OF INDUSTRIAL ENGINEERING

Course Number ES411

Descriptive Title ENGINEERING ECONOMY
Number of Units 3
Number of Hours 54
Pre-requisites Principles of Economics
Co-requisite -
Course Description The course shall introduce the value of economy in the decision making process of engineering designs and problems. It shall emphasize sensitivity on costs and its characteristics that
shall lead to a better analysis and to a more accurate forecast and solution to problems with different economic study periods and conditions. It shall present an accurate and thorough
comparison of alternatives in the financial aspect of engineering designs and come up with a decision that best suits the problem.
CIT UNIVERSITY COLLEGE OF ENGINEERING AND ARCHITECTURE
VISION STATEMENT VISION STATEMENT
A top academic institution continuously developing values-driven, highly competent, and innovative A reputable school of engineering and architecture regarded by industry & government as a prime
Technologians mover for local and international development

MISSION STATEMENT MISSION STATEMENT

To ensure quality instruction, research and community extension for the total development of
Technologians committed in practicing professionalism and in meeting the demands of local, national
and global communities
CORE VALUES
 SPIRIT OF ALTRUISM is upholding the common good rather than one’s own interest and enhances
capacity of persons to give witness to God’s love for mankind.
 PASSION FOR EXCELLENCE is total quality in any endeavor by striving to work in the best way that
one could.
 INTEGRITY is an uncompromising adherence to moral and ethical principles.
 RESPONSIBILITY is accountability over one’s actions.
 INNOVATIVENESS is the ability to create new things as well as to act effectively and imaginatively in
difficult situations.
 TEAMWORK is the promotion of cooperation and collegiality in the pursuit of the institution’s mission.
 TENACITY is the persistent determination to achieve the Vision, Mission, and Goals of the University.
STATEMENT OF CORE COMPETENCY
Science & Technology is a way of academic life among administrators, faculty, and students. In the
design, administration, and implementation of curricular programs, technology is embedded, articulated,
and actuated.
To provide quality education in the development of technically competent, innovative and upright
engineers and architects
GOAL
To produce graduates with a comprehensive knowledge and competence in engineering and
architecture responsive to the dynamic needs of the local and global communities
INDUSTRIAL ENGINEERING DEPARTMENT
VISION STATEMENT
A leading center of Industrial Engineering education renowned for its excellence and innovation in
continuously developing Vanguards with professional competence, research aptitude and personal
social responsibility
MISSION STATEMENT
To produce globally competitive Vanguards who lead in conceptualizing and implementing effective,
economical and environmentally sustainable service and manufacturing systems optimization designs
through providing practical and advanced knowledge in sciences, engineering and management
GENERAL GOAL
To nurture students to lead in the design, improvement and installation of integrated systems of people,
materials, information, equipment and energy. Graduates of the Industrial Engineering program are
expected to be capable in applying appropriate scientific and mathematical competence in solving
diverse contemporary management problems.
PROGRAM EDUCATIONAL OBJECTIVES (PEO)
a. Must be proficient to design, improve and install effective, economical and environmentally
sustainable systems of business resources in manufacturing and service firms.
b. Must have the passion for excellence and quest for innovation, and must be trainable, self-
motivated, competitive and capable to lead others.
c. Must be prepared for graduate work and research in at least one area of the IE field of practice
like manufacturing systems engineering, operations research and optimization, human factors
engineering and management systems.
d. Must be responsive to the needs of the society as well as be proactive in upholding the
profession.
e. Must be able to plan, develop and manage work standards, statistical process control systems,
production planning and materials control systems, manufacturing and service facilities,
operations research models for production and operations, and information systems.
STUDENT OUTCOMES
a. Ability to apply knowledge of mathematics and sciences to solve engineering problems.
b. An ability to design and conduct experiments, as well as to analyze and interpret data.
c. Ability to design a system, component, or process to meet desired needs within realistic
constraints such as economic, environmental, social, political, ethical, health and safety,
manufacturability, and sustainability, in accordance with standards.
d. Ability to function on multidisciplinary teams
e. An ability to identify, formulate, and solve engineering problems.
f. Understanding of professional, and ethical responsibility.
g. Ability to communicate effectively
h. broad education necessary to understand the impact of engineering solutions in a global,
economic, environmental, and societal context
i. recognition of the need for, and an ability to engage in life-long learning
j. knowledge of contemporary issues
k. ability to use techniques, skills, and modern engineering tools necessary for engineering
practice
l. knowledge and understanding of engineering and management principles as a member and
leader in a team, to manage projects and in multidisciplinary environments

Course Learning Outcomes: P.O. Code Link(s) Course Outcomes: P.O. Code Link(s)
CLO1. Identify different cash flows in an activity a, e, g, h, j, k CLO3. Evaluate different conditions of the decision-making environment a, e, g, h, j, k
CLO2. Solve for the value of money on different times a, e, g, h, j, k CLO4. Decide and select the best course of action on economic basis a, e, g, h, j, k

Assessment Tools / Time

Intended Learning Outcomes (ILO) Teaching and Learning Week
Content CLO1 CLO2 CLO3 CLO4 Frame
Activities (TLA) Tasks No.
(hrs)
Course Orientation 3 LO1: Define Engineering Economy  Interactive discussion on  Seatwork 3 hrs 1
LO2: Explain its critical role in the engineering engineering economy  Quiz
Introduction to Engineering Economy design and analysis  Group Activity: Product  Oral Recitation
and Cost Concepts LO3: Differentiate the types of costs and recognize Manufacturing
Definitions the value of each in the decision-making process  Problem Solving
Principles of Engineering Economy Exercises
Engineering Economy and the Design
Process
Cost Concepts for Decision Making
 Assessment Tools / Time
Intended Learning Outcomes (ILO) Teaching and Learning Week
Content CLO1 CLO2 CLO3 CLO4 Frame
Activities (TLA) Tasks No.
(hrs)
Present Economy Studies 3 1 2 3 LO1. Distinguish the different incurred costs of  Team-based  Boardwork 3 hrs 2
Two-Machine Problems each alternative Discussion/Collaborative  Quiz
Make or Buy Decision LO2. Make a decision that suits the problem based Learning  Oral Recitation
To Produce or not to produce on the most profitable alternative  Oral Report
 Problem Solving
Exercises
Money-Time Relationships, Equivalence 3 3 1 2 LO1. Explain the importance of time value of  Interactive discussion on  Seatwork 9 hrs 3-5
and Cash Flows money money-time relationship  Quiz
Interest and the Time Value of Money LO2: Use interests in decision making with costs  Problem Solving  Boardwork
The Concept of Equivalence that covers long period of time Exercises
Cash Flow Diagramming  Case Analysis
LO3: Develop Cash Flow diagrams to facilitate
Single Cash Flows analysis in engineering economy problems
Equivalent Uniform Series (Annuity) LO4: Recognize cash flow characteristic of a
Ordinary Annuity problem, whether single, annuity or gradients, to
Deferred Annuity assist in the analysis of the problem
Annuity Due
Gradients
Arithmetic Gradients
Geometric Gradients
Basic Economy Methods 2 3 1 3 LO1: Discuss the existence of Minimum Attractive  Team-based  Boardwork 12 hrs 6-9
Minimum Rate of Return Rate of Return Discussion/Collaborative  Quiz
Present Worth Method LO2: Choose the best alternative that proves to be Learning  Oral Recitation
Future Worth Method profitable using Present Worth, Future Worth and  Oral Report
Annual Worth Method Annual Worth Method  Case Analysis
Internal Rate of Return Method LO3: Recognize the difference between Internal
External Rate of Return Method and External Rate of Return
Payback Period Method LO4: Choose the best alternative that proves to
Benefit/Cost Ratio Method give a higher return using Internal and External rate
of Return
LO5: Compute for the payback period of
alternatives to aid in decision making
LO6: Determine the feasibility of an alternative
using Benefit/Cost ratio
 Assessment Tools / Time
Intended Learning Outcomes (ILO) Teaching and Learning Week
Content CLO1 CLO2 CLO3 CLO4 Frame
Activities (TLA) Tasks No.
(hrs)
Decision-Making Under Different 3 3 3 3 LO1. Recognize situations that require different  Interactive Discussion  Seatwork 9 hrs 10-12
Environments decision making strategy: situations under  Problem Solving  Quiz
Decision Under Certainty certainty, recognizing risk and admitting uncertainty  Case Analysis  Oral Recitation
Evaluation of Mutually Exclusive Alternative LO2: Choose the best alternatives having certain
Evaluation of Independent Projects outcomes
Break Even Analysis LO3: Determine the breakeven point of a certain
Depreciation and After-Tax Economic alternative
Analysis LO4: Discuss the importance of depreciation
Replacement Studies LO5: Identify the different ways of getting the
depreciation expense
LO6: Determine whether to replace an existing
asset with a new one or not
LO7: Determine the time an asset should be
replaces
Decisions Recognizing Risks 3 3 3 3 LO1. Recognize the situations that needs decisions  Interactive Discussion  Seatwork 6 hrs 13-14
Expected Monetary Value of Alternatives under recognizing risk  Problem Solving  Quiz
Discounted Decision Tree Analysis LO2: Determine the expected monetary values of  Case Analysis  Oral Recitation
alternatives
LO3: Develop Decision Tree leading to a better
analysis of engineering economy problems
Decisions Under Uncertainty 3 3 3 3 LO1. Differentiate decision analysis models that  Interactive Discussion  Seatwork 6 hrs 15-16
Sensitivity Analysis admits uncertainty  Problem Solving  Quiz
Decision Analysis Models LO2: Choose the best alternative using appropriate  Case Analysis  Oral Recitation
decision analysis model

Legend: Whether the CLO is addressed by the content/ topic: 1 – Slightly Addressed 2 – Moderately Addressed 3 – Substantially Addressed
 Assessment System and Performance Standards Final Grade Evaluation System
Formative Assessment: Summative Assessment: Assessment System MG = 0.40 CS1+ 0.25 PE + 0.35 ME
 Seatwork / Homework  Major Exams  Quizzes (Problem FG = 0.50 MG + 0.15 CS2 + 0.15 PFE + 0.20 FE
 Oral Recitation  Case Analysis Solving) PE = Prelim Exam CS1 = Class Standing before Midterm Exam MG = Midterm Grade
 Boardworks
 Teacher Evaluation ME = Midterm Exam CS2 = Class Standing after Midterm Exam FG = Final Grade
PFE = Prefinal Exam
FE = Final Exam
LIST OF RESOURCES
REFERENCES / PRINTED LEARNING RESOURCES WEB AND OTHER LEARNING RESOURCES
658.15/Su56/2009 Sullivan, A. G. (2009) Engineering Economy 14th Edition. Upper Saddle River, http://www.mathalino.com/tags/tags/engineering-economy
New Jersey: Pearson.
http://fire.nist.gov/bfrlpubs/build02/PDF/b02155.pdf
658.15/P22/2011 Park, C. S. (2011) Contemporary Engineering Economics, Boston: Pearson
http://accountinginfo.com/study/dep/depreciation-01.htm

June Passion for Excellence September Spirit of Altruism & Commitment December Generosity March Honesty
July Interdependence October Peace & Unity January Global Competitiveness April Patience & Perseverance
August Teamwork & Tenacity November Nationalism February Love May Care for Mother Earth
SYLLABUS REVISION:
Version Adopted: 03

Prepared by: Engr. Anna Marie L. Arnoco Adopted by: Industrial Engineering Department
IE Department Faculty

Noted by: Engr. Alein B. Navares

Chair

Approved by: Dr. Evangeline C. Evangelista

Dean

History
Version 01 AY: 1st Semester 2011-2012 Date Created: June 2011 Author: AMLArnoco
Version 02 AY: 1st Semester 2014-2015 Date Created: May 2014 Author: AMLArnoco
Version 03 AY: 2nd Semester 2015-2016 Date Created: November 2015Author: AMLArnoco