LE/ENG 2001:

Engineering Projects: Management,

Economics and Safety
Professor Regina Lee & Hany Farag

Department of Electrical Engineering and Computer Science (EECS)

Office: LSE 1012F1
Tel: (416) 736 2100 33488
E-mail: hefarag@cse.yorku.ca

LE/ENG 2001
q

Lecture Timetable
Tuesdays & Thursdays;
Sec E: 10 11:30
Sec Z: 8:30 10:00

CB 121
CB 121

Tutorial
Sec E: Friday.

9:30 10:30

CB 121

Sec Z: Wed and Mond.

9:30 10:30

CB 121

LE/ENG 2001:
Outline

This course covers the administration of design projects

Project
Management
Reginal LEE

Engineering
Economics
Hany Farag

Health and
Safety
Tomorr Cerriku

Both of these disciplines are at the heart of successful management of the

business side of engineering
And a large majority of engineering graduates will be involved in
management
either of engineering projects or in other fields
You may not appreciate this knowledge yet, but it will benefit your career!

LE/ENG 2001
Textbook
-Niall, M. Fraser, Elizabeth. M Jewkes, Irwin Bernhardt, May Tajima,Engineering
Economics, Financial Decision Making For Engineers, 5th edition, Prentice Hall

LE/ENG 2001
Textbook
Leland Blank, Engineering Economy, 2nd edition, McGraw-Hill

LE/ENG 2001
Grading Scheme

Midterm Engineering Economic

30 %

Midterm Project management

15%

Design Project

15%

Final Exam

40%

LE/ENG 2001
Whats in the grade
Letter

Point

Description

A+

Exceptional

Excellent

B+

Very Good

Good

C+

Competent

Fairly Competent

D+

Passing

Barely Passing

Marginally Failing

Failing
7

What is a project?

The professional organisation for project managers is the

Project Management Institute (PMI)
By their definitions
A project is a
undertaken to achieve a
particular
and to which project management can be
applied, regardless of the projects size, budget, or timeline
a project is a complex, non-routine, one-time effort
limited by time, budget, resources, and performance
specifications designed to meet customers needs (Gray &
Larson)

Comparison of Routine Work with Projects

1 Taking class notes

2 Daily entering sales receipts into the
accounting ledger
3 Writing a term paper
4 Setting up a sales kiosk for a
professional accounting meeting
5 Responding to a supply-chain
request
6 Practicing scales on the piano

8 Attaching tags on a
manufactured product
9 Developing a supply-chain
information system
10 Designing an iPod that is
approximately 2 X 4 inches,
interfaces with PC, and
stores 10,000 songs
11 Wire-tag projects for General
Electric (GE) and
Wal-Mart

7 Writing a new piano piece

TABLE 1.1
19

What is project management?

Project management is the application of knowledge, skills,

tools, and techniques to a broad range of activities in order to
meet the requirements of a particular project. Project
management is comprised of five processes
initiating, planning, executing, controlling, and closing
And nine knowledge areas
Project Integration, Project Scope, Project Time, Project
Cost, Project Quality, Project Human Resources, Project
Communications, Project Risk Management and Project
Procurement
10

What is project management?

The phrase project management began to emerge in the late

1950s and early 1960s when the size, scope, duration, and
resources required for new projects began to deserve more
analysis and attention
Today, project management is used globally by multi-billiondollar corporations, governments, and smaller organizations
alike as a means of meeting their customers or constituents
needs by both standardizing and reducing the basic tasks
necessary to complete a project in the most effective and
efficient manner
11

Engineering Economics

Engineering economics

Engineering economics is the discipline which deals with the

management of the resources used in a project
particularly the financial aspects
Engineering economics is the science which deals with the
techniques of quantitative analysis useful for selecting a
preferable alternative from several technically viable ones
from Engineering Economics in Canada
The aim is to identify as closely as possible the economic facts
associated with each of the choices, thereby facilitating the
decision-making process
13

Engineering Economics Outline

Engineering
Decision Making
(Chapter 1)

Time Value of
Money
(Chapter 2)

Cash Flow
Diagram
(Chapter 3)

Comparison
Methods Part# I
(Chapter 4)

Comparison
Methods Part # 2
(Chapter 5)

Taxes and
Inflation
(Chapters 8 and
9)
14

Engineering Decision Making

q Although engineering is still mainly a technical discipline, other skills are

necessary:
project management
making decisions
q Often the purpose of engineering is to formulate one or more technically
feasible solutions
how does one then decide between them?
q Frequently, the basis for the choice is an economic one
which option costs less
affects bid value or product price
q Other factors e.g. environmental, political may also be important or
overriding concerns
15

Cell phones

16

Smart Phones

17

Why Engineering Economy is Important

to Engineers
Engineers design and create
Designing involves economic decisions
Engineers must be able to incorporate
economic analysis into their designs
Engineers must select and execute
from multiple alternatives
A proper economic analysis for
selection & execution is a
fundamental aspect of engineering
design
Slides for Engineering Economy, 2nd
Canadian edition, Blank, Tarquin,
Iverson 2012 McGraw-Hill Ltd.

1-18

Engineering Economics

qThe original concept of engineering economics was that

stated above
how to choose the cheapest option
however, this needed some mathematical understanding of
the situation
qNow, more management decisions are being
undertaken by engineers
complex products and markets
finely-tuned optimization of manufacturing
rapid technological development
19

Making DecisionsDecision
Pyramid

Decisions may be
made on basis of
preferences, politics
and people
Decisions are made, in
the end, on the basis of
belief, but facts should
be the foundation of
belief
These facts should tend
to control politics,
people, and
preferences.
Source: Engineering Economics, 5th edition, by Fraser Pearson

20

Engineering Economics Definition

The science which deals with the techniques of quantitative

analysis useful for selecting a preferable choice from several
technically viable ones
qThe evaluation of costs and benefits makes up the
bulk of engineering economics.

21

Making Decisions

qThe aim of the engineering economics is to provide facts to

inform the decision-making process
qDecisions may be made on basis of preferences, politics
and people, but Economic Analysis establishes the facts
upon which a decision can be based
qThese facts should tend to control politics, people, and
preferences.
qFacts accumulated over time create intuition, experience
that control our gut feeling about a decision
22

Dealing with Abstractions

vWhen dealing with the complexities of reality, it is advisable

to use a model.

Source: Engineering Economics, 5th edition, by Fraser Pearson

23

Modeling Process

vA model is an simplification of reality that captures

information useful and appropriate for a specific purpose.
vModels can be used to analyze a situation and make
predictions about the real world.
vEngineering Economic Models typically represent a project
through estimates of its costs and benefits over time

24

Example: Buying a car

P[personal
constraints

Car Model

1980 Corvette

2007 Toyota
Corolla

2007 BMW 5Series

Purchase

$12 000

$7000

$25 000

Operation

$ 400/month

$300/month

$450/month

Resale

$ 13 000

$5000

$23 000

Analysis
Uncertainty
is ignored

Money
is there
25