Exam 1: Making Economic Decisions

Case Study 1 Ross Manufacturing in Atlanta is considering outsourcing a component from an offshore company. The company has collected the following data to make an economic decision. Cost to make it in-house = $96 per unit. Annual Demand = 500,000 units Price quoted by the Asian company = $90 per unit plus a shipping cost of $20,000 per shipment. -Determine the number of shipments per year that the company can require the supplier to make in order to justify outsourcing.

In decision making related to engineering projects, based on economics, the most important non-economic factor is: _

Case Study 1 Ross Manufacturing in Atlanta is considering outsourcing a component from an offshore company. The company has collected the following data to make an economic decision. Cost to make it in-house = $96 per unit. Annual Demand = 500,000 units Price quoted by the Asian company = $90 per unit plus a shipping cost of $20,000 per shipment. -In addition to cost consideration, what other factors would weigh in decision making?

In engineering economic cost is a decision making tangible factor.

Most engineering projects that have economic consequences have to be justified using economic decision making methods.

Jim Watts, a senior engineer at a major global company, has been working in a foreign country all of 2016. He was paid in local currency, FC. One FC = 0.3$. The currency fluctuation in 2016 for each of the four quarters was 6.2, 6.9, 4.2, and 3.8. This contracted salary for the year was that he would be paid 75,000 in FC per quarter. What was his earnings in $ for 2016?

An example for fixed input in economic decision making is that the project manager has a budget of one million dollars for this project.

Decision making in engineering economy is concerned with choosing the best __________.

In an economic decision making, when the inputs and outputs are fixed, the criterion to use is minimize the input.