Thursday, 17 December 2020

Engineering economy


Engineering economy, since engineering is an accurate science, and it is characterized by the ability to come up with practical and realistic solutions to realistic and current problems, it was important for this science to be integrated with economics and its various theories and methods so that the final result is engineering economics.


Engineering economics as a concept, like other concepts and terms, its definition differs from one scientist to another and from one specialist to another, but here we will try to collect the many definitions of this concept. So that we can provide a comprehensive definition of this general term.


It can be said, to begin with, that engineering economics, formerly known as engineering economics:


Engineering economics

It is a subspecialty of general economics concerned with applying economic principles in analyzing engineering decisions and vice versa,


That is, bringing economics to engineering, and making use of engineering approaches and methods in solving economic problems.


This new economic branch also focuses on the areas of microeconomics; It studies the behavior of individuals and companies in making decisions regarding the allocation of limited resources.


Engineering Economics

If this relatively modern economic branch is the son of engineering, then it also requires the application of principles of engineering design and analysis; To provide goods and services that satisfy the consumer at a reasonable cost, in addition to identifying the benefits and costs associated with the various projects; To determine whether it is providing enough money to guarantee its capital investment.


As long as this economy is highly compatible with microeconomics, it must also be said that it is dedicated to solving problems and making decisions at the operational level.


Thus, engineering economics refers to the aspects of economics and tools of analysis most relevant to the decision-making process of an engineer.


Characteristics of engineering economics

In any case, we will try to point out the most prominent features of engineering economics, depending on the previous methods, as follows:

  • Engineering economics closely aligns with traditional microeconomics.
  • Engineering economics focuses on problem-solving and process decision-making.
  • The economics of engineering can lead to improvements in the quality of tactical objectives at the expense of strategic effectiveness.
  • Engineering economics is useful for determining alternative uses of limited resources and for choosing a preferred course of action.
  • Engineering economics is of a practical nature; In a sense, it sets aside abstract theoretical economic issues.
  • Engineering economics mainly uses a set of economic concepts and principles, but without ceasing to benefit from engineering bidding and approaches alike.
  • The economics of engineering integrates economic theory with engineering practice.



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