Engineering Economics (BFT 214/3)

The origin of the term 'Economics' lies in the Greek words oikan and nomos. It means laws of households signifies household economics. The subject now been defined as a social science which covers the actions of individuals and groups of individuals in the process of producing, exchanging and consuming of goods and services. Economics is the oldest of the arts, the newest of the sciences, and it is indeed, the queen of the social sciences. It is growing fast and hence its scope is continually changing and expanding as defined and discussed at different times by different economists.

A production economist focuses on assessment, and will use an aggregate description of technology to answer such questions as: How does the firm compare to its competitors? Has the firm improved its production capabilities? A production engineer focuses on optimizing resources, and will use a detailed description of technology to answer a completely different set of questions: Which operations or plants should produce which products at what time? Should resource capacity be expanded and, if so, which resources should be acquired? Each group could benefit from the other group's perspective. This book offers a unified, integrated point of view that bridges the gap between these two historically distinct perspectives.

This reference outlines the fundamental concepts and strategies for economic assessments for informed management decisions in industry. The book illustrates how to prepare capital cost and operating expense estimates, profitability analyses, and feasibility studies, and how to execute sensitivity and uncertainty assessments. From financial reports to opportunity costs and engineering trade-offs, Process Engineering Economicsconsiders a wide range of alternatives for profitable investing and for projecting outcomes in various chemical and engineering fields. It also explains how to monitor costs, finances, and economic limitations at every stage of chemical project design, preparation, and evaluation.