Define Engineering Economy and explain the foundation of Engineering Economy in terms of seven basic principles.

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Explanation:

ENGINEERING ECONOMY:

In a simple way, Engineering Economy simply refers to the study of Economics which is related to engineers that is the study of Economic decisions by people in the engineering field. The study of Engineering Economy is very important because Engineering is a major manufacturing part in every country's economy.

With the study of Economics by Engineering that is Engineering Economy, engineers can make rational decisions after seeing alternatives.

The foundation of Engineering Economy in terms of seven basic principles:

(A). Creation of Alternatives: there will always be a problem and every problem had one or more solutions. When a problem has been seen as a problem alternative solutions come in.

(B). Differences in the Alternatives : this part is when engineers makes the best decision(choice) among alternates.

(C). Your viewpoint should be consistent: consistency is power. In order to make decisions in Engineering works or projects, viewpoint should be consistent.

(D). Develop Common Performance Measures: in order to make sure that the project is perfected there should be common performance measures.

(E). Considering Relevant Criteria: relevant Criteria will be met before the best choice is decided

(F). Risk making: Engineering projects should not be put under risk and thus is why this principle is very important.

(G). Decision retargeting: go back to the alternatives and recheck your choices.