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ISE 211 – Engineering Economics

Industrial and Systems Engineering

Fall 2009 3 credits

This course deals with economic analysis of engineering, in particular, with the evaluation of
projects in terms of time, costs and worth. Topics include interest rates, time value of money,
present and future worth, economic evaluation of alternative decisions, replacement analysis,
inflation, taxes, cost accounting, activity-based accounting and economic justification of new

Course Objectives
To introduce and apply fundamental concepts of engineering economic analysis. Upon
successful completion of this course, students should be able to do the following: a) Explain
and understand terminology of engineering economics; b) Calculate present worth, equivalent
annual cost, and breakeven rate of return for a predicted series of cash flows; and c) Compare
different alternatives using incremental analysis, present worth, equivalent annual cost, or the
benefit/cost ratio in a technically correct manner.

Class Time Schedule Room LH 009 Tuesday/Thursday 1:15 to 2:40 PM

Instructor Thomas Koon Office: L12 Engineering Building

Office Hours: T/Th. 2:45 to 4:15 or by Appointment

TA Gaurav Kumar Office: L9 Watson Engineering Building

Office Hours: Monday 3 to 5 Plus Tu/Th 3 to 4
+ Anne Office: L3 Watson Engineering Building Tu/Th 12 to 2PM
Class Website

Newnan, Donald G., Eschenbach, Ted G., and Lavelle, Jerome P. - Engineering Economic
Analysis, 10th Edition, Oxford University Press, NY Oxford, 2009. ISBN 978-0-19-533541-5

Newnan, Donald G. and Wheeler, Ed. - Study Guide for Engineering Economic Analysis, 10th
Edition, Oxford University Press, New York, Oxford, 2009.

Grade Dependence:
Quiz (6) 180 points
Final Exam 100 points
Final Project 40 points
Case Studies 80 points
Total number of points 400 points
Unless you are told to work in teams all work is expected to be of your own achievement. If
you are found cheating on an exam or assignment you will be given a grade of zero on that
assignment and your final grade will be based upon the total score you earn with the zero