Plagued by capital equipment alternative investment decisions? Not
certain if you need to invest, or if the investment makes economic sense?
Need to communicate sensible investment decision criteria to your team?
Engineering Economics is an 8-hour program focused on capital
investment decision-making and related investment issues. At the
conclusion of this program, your staff will understand:
Your organization's criteria for investment decisions.
The time-value-of-money concept.
How to assess alternative investments.
How to assess and minimize risk associated with alternative investments.
Who Should Attend
Manufacturing managers, manufacturing engineers, industrial engineers, and
others with a role in capital investment decision criteria should attend this
Engineering Economics Syllabus
1: Introduction & Cost
Course overview. The
capital acquisition and budgeting process.
Investment decision considerations.
Cost elements, including labor, material, equipment, installation,
and moving services. Depreciation
and amortization. Costs related
to poor quality and recurring nonconformances.
Quality cost data bases. Standards,
efficiency factors, and utilization factors.
Capturing manufacturing costs. Approval
levels for capital acquisitions. Prioritizing
capital investment candidates. Class
2: Time Value of Money.
The time value of money concept.
Cost of money considerations, including interest rate determination,
and compounding period, and other factors.
Calculating simple and compound interest.
Nominal and effective interest rates.
Interest formulas relating present and future values.
Microsoft Excel features
that support time value of money calculations.
The impact of burden, overhead, and general and administrative rates
on capital investment decisions. Identifying
interest rate factors and overhead rates.
3: Investment Approaches.
Capital investment considerations. The annual worth, net present
value, internal rate of return, and payback approaches.
Replacement analysis. Considering
depreciation in investment decisions. Tax
considerations. Advantages and
disadvantages of the different investment analysis approaches.
Microsoft Excel features
that support investment analysis. Class
4: Risk Management.
Capital investment risk areas, including design package evaluation,
facilitization, procurement, environmental health and safety, regulatory,
and other risks. Capital
investment risk identification and analysis.
Environmental health and safety considerations.
Capital equipment supplier stability and after-sale support.
Identifying capital equipment after sale maintenance requirements.
Selecting capital equipment sources.
The Yes-No analysis approach. Systems
failure analysis. Creating capital equipment specifications.
The roles of the Procurement and Finance organizations in capital
investment decision-making. Course
critique. Final examination.