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MG6863 Engineering Economics Hand Written Lecture Notes - Krishnamoorthy Edition
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Engineering Economics Premium Lecture Notes Contains all units by Mr. Krishnamoorthy. Specially for Mechanical Engineering Candidates. Syllabus Covered based on Anna University B.E Mechanical Engineering Eight Semester.

CONTENT:
UNIT-1
INTRODUCTION TO ECONOMICS
UNIT-2
VALUE ENGINEERING
UNIT-3
CASH FLOW
UNIT-4
REPLACE AND MAINTENANCE ANALYSIS
UNIT-5
DEPRECIATION

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UNIT-1
INTRODUCTION TO ECONOMICS
Flow in an economy
Micro economics
Macro economics
Objectives of economy
Demand and supply
The law of demand and supply
Technical efficiency
Economic efficiency
Scope of engineering economics
Elements of cost
Marginal cost
Marginal revenue
Sunk cost
Opportunity cost
Break even analysis
Profit volume ratio
Elementary economic analysis
1. Material selection for the product
2. Design selection for a product
3. Building material selection for construction


UNIT-2
VALUE ENGINEERING
Make or buy decision
Approaches of make or buy decision/ types
Problems
Value engineering
Function
Classification of function
1. Primary function
2. Secondary function
3. Tertiary function
Value engineering aims/ objectives
Value engineering procedure
Time value money
Interest formulae and their application
1. Single payment compound amount
2. Equal payments series amount
3. Equal payment series sinking fund
4. Equal payment series capital recovery amount
Effective interest rate
Problems

UNIT-3
CASH FLOW
Types of cash flow
1. Present worth method
a. Revenue dominated cash flow diagram
b. Cost dominated cash flow diagram
2. Future worth method
a. Revenue dominated cash flow diagram
b. Cost dominated cash flow diagram
3. Annual equivalent method
a. Revenue dominated cash flow diagram
b. Cost dominated cash flow diagram
4. Rate of return method


UNIT-4
REPLACE AND MAINTENANCE ANALYSIS
Types of maintenance
1. Preventive maintenance
2. Breakdown maintenance
Types of replacement problems
1. Determination of economic life of an asset
2. Replacement of existing asset with a new asset
Capital recovery with return
Concept of challenger and defender
Simple probabilities model for items which fail completely

UNIT-5
DEPRECIATION
Methods of depreciation
1. Straight line method of depreciation
2. Declining balance method of depreciation
3. Sum of the year digit method of depreciation
4. Service output method of depreciation
Evaluation of public alternation
Inflation adjusted decision
Procedure to adjust inflation
Inflation adjusted economic life of machine
Economic life determination without inflationary effect
Economic life determination with inflationary effect


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