KARPAGAM INSTITUTE OF TECHNOLOGY

COIMBATORE-641 105
DEPARTMENT OF MECHANICAL ENGINEERING

COURSE PLAN

Subject Code & Name: ME6863 & ENGINEERING ECONOMICS AND COST ANALYSIS

Department: MECHANICAL Year: IV Semester: 08

Academic Year: 2016-2017
Regulation Year: 2013

S.No Lecturer Topics to be covered Support Material

(Hr) (with Page No.)
UNIT-I (INTRODUCTION TO ECONOMICS)
1 1 Overview and basics of Economics
2 1 Introduction to Economics- Flow in an economy. T1-1
3 1 Law of supply and demand T1-2
4 1 Concept of Engineering Economics T1-4
Engineering efficiency, Economic efficiency, Scope of
5 1 T1-4
engineering economics
Element of costs, Marginal cost, Marginal Revenue, Sunk
6 1 T1-7
cost, Opportunity cost,
7 1 Break-even analysis- P/V ratio, T1-9
Elementary economic Analysis. Material selection for
8 1 T1-16
product Design, selection for a product,
9 1 Process planning T1-22
10 1 Discussion of Anna University Question papers
UNIT-2 (VALUE ENGINEERING)
11 1 Overview and basics of Value engineering
12 1 Make or buy decision. - Value engineering T1-168
Value engineering - Function, aims, Value engineering
13 1 T1-198
procedure.
14 1 Interest formulae and their applications. Time value of T1-26
 money
Single payment compound amount factor, Single payment
15 1 T1-30
present worth factor,
16 1 Equal payment series sinking fund factor T1-31
17 1 Equal payment series payment Present worth factor T1-29
18 1 Equal payment series capital recovery factor T1-32
19 1 Uniform gradient series annual equivalent factor T1-35
20 1 Effective interest rate, Examples in all the methods. T1-37
21 1 Discussion of Anna University Question papers
UNIT-3 (CASH FLOW)
22 1 Overview and basics of Cash Flow
Methods of comparison of alternatives.
23 1 Present worth method (Revenue dominated cash flow T1-42
diagram).
24 1 Problems on Present worth method T1-44
Future worth method (Revenue dominated cash flow
25 1 T1-55
diagram, cost dominated cash flow diagram),
26 1 Problems on Future worth method T1-56
Annual equivalent method (Revenue dominated cash flow
27 1 diagram, cost dominated cash flow diagram). T1-68

28 1 Problems Annual equivalent method T1-70

29 1 Rate of return method T1-88
30 1 Examples in all the methods.

31 1 Discussion of Anna University Question papers

UNIT-4 (REPLACEMENT AND MAINTENANCE ANALYSIS)
Introduction and basics of Replacement and Maintenance
32 1
Analysis
33 1 Types of maintenance. T1-101
34 1 Types of replacement problem. T1-101
35 1 Determination of economic life of an asset. T1-102
36 1 Replacement of an asset with a new asset. T1-108
37 1 Types of maintenance capital recovery with return. T1-108
 38 1 Concept of challenger and defender. T1-109
39 1 Simple probabilistic model for items which fail completely. T1-118
40 1 Problems
41 1 Discussion of Anna University Question papers
UNIT-5 (DEPRECIATION)
42 1 Introduction and basics of Depreciation
43 1 Depreciation- Introduction, Causes of Depreciation T1-126
Straight line method of depreciation, declining balance
44 1 T1-126
method of depreciation
45 1 Sum of the years digits method of depreciation T1-130
Sinking fund method of depreciation/ Annuity method of
46 1 T1-131
Depreciation,
47 1 Service output method of depreciation T1-134
Evaluation of public alternatives- introduction and
48 1 T1-137
Examples
49 1 Inflation adjusted decisions - procedure to adjust inflation. T1-147
50 1 Examples on comparison of alternatives T1-38
51 1 Determination of economic life of asset. T1-102
52 1 Discussion of Anna University Question papers

TEXT BOOKS:
Panneer Selvam, R, “Engineering Economics”, Prentice Hall of India Ltd, New Delhi, 2001.

REFERENCE BOOKS:
R1 Chan S.Park, “Contemporary Engineering Economics”, Prentice Hall of India, 2002.
Donald.G. Newman, Jerome.P.Lavelle, “Engineering Economics and analysis” Engg.
R2
. Degarmo, E.P., Sullivan, W.G and Canada, J.R, “Engineering Economy”, Macmillan,
R3 New York, 1984
Grant.E.L., Ireson.W.G., and Leavenworth, R.S, “Principles of Engineering
Economy”, Ronald Press, New York,1976.
R4
R5. Zahid A khan: Engineering Economy, "Engineering Economy", Dorling Kindersley, 2012

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