Engineering Economics Research
- [Paris Sciences et Lettres]
- Overview
Fundamentally, engineering economics involves formulating, estimating, and evaluating economic outcomes when alternatives to achieving a stated purpose are available.
Engineering economics, formerly known as engineering economics, is a subset of economics that involves the use and application of principles of economics in engineering decision analysis.
As a discipline, it focuses on a branch of economics known as microeconomics because it studies the behavior of individuals and companies when making decisions about the allocation of limited resources.
Therefore, it focuses on the decision-making process, its context and environment. It is pragmatic in nature, combining economic theory with engineering practice. However, it is also a simplified application of microeconomic theory, as it assumes that factors such as price determination, competition, and demand/supply are fixed inputs from other sources.
However, as a discipline, it is closely related to other disciplines such as statistics, mathematics and cost accounting. It draws on the logical framework of economics, but adds the analytical power of mathematics and statistics.
- The Four Fundamentals of Engineering Economics
- Principle 1: A dollar earned today is worth more than a dollar earned in the future.
- Principle 2: The only thing that matters is the difference between alternatives.
- Principle 3: Marginal revenue must exceed marginal cost.
- Principle 4: Additional risk is not taken without the expected additional return.
[More to come ...]
