Business Administration 1220E Lecture Notes - Lecture 4: Process Flow Diagram, Engineering Economics, Marginal Cost
!"#$%&'"()#*#
+#,"-(*#.*'/%"%0123#%014%5'/*'554*'/%521'16*2#%752*#*1'#
8
95%63#,%*75',*0)%,.5%23#,1654:#;#,"$5.1(754:#%'557#%-50145%14/"'*<*'/%,.5%
1=54",*1'
9.",%*#%*6=14,"',%,1%,.5%23#,1654>%&45%?5%23445',()%655,*'/%,.5*4%
'557#>
○
8
@AB%C@&DE%,1%=41F*75%,.5%4*/.,%=41732,;#54F*25G%*'%,.5%4*/.,%H3"',*,)G%",%,.5%
4*/.,%=4*25G%*'%,.5%4*/.,%=("25G%,.5%?")%,.5%23#,1654%5I=52,#%,1%4525*F5
8
J"#57%1'%,.5%23#,1654K#%'557#G%=4*14*,*<5%13,2165#L
!"#$
M5#24*=,*1'
N"(35
O6=(*2",*1'
P145>
Q3"(*,)
M15#%,.5%23#,1654%?"',%"%
.*/.%H3"(*,)%=41732,>
Q3"',*,)
&45%,.545%5'13/.%=41732,#%
"F"*("-(5%,1%#",*#0)%23#,1654%
'557#>
R4*25
9.",%"45%,.5)%?*((*'/%,1%=")>
S54F*25
R41732,%?"44"',)G%75(*F54)G%
04"'2.*#*'/%"44"'/565',#G%
2.52$T3=#G%23#,16*<",*1'
U3'2,*1';U5",345
M15#%,.5%23#,1654%756"'7%
"')%#=52*0*2%05",345#%V"77T
1'#W>
8
R4125##%&'"()#*#%V#165%2"#5#W
9.",%"45%134%2"="2*,*5#>%J1,,(5'52$#>
8
&45%,.5%2."'/5#%'525##"4)%,1%655,;#3#,"*'%756"'7>
8
R4125##%U(1?%M*"/4"6
8
X5)%P1'25=,#
P"="2*,)
!.5145,*2"(E%!.5%13,=3,%,.5%5H3*=65',;#)#,56%*#%-3*(,%,1%=417325
○
@=54",*'/E%!.5%13,=3,%,.5%5H3*=65',;#)#,56%"2,3"(()%"2.*5F5#
○
8
J1,,(5'52$
!.5%#(1?5#,%#,5=%*'%,.5%=4125##
○
S=557%75,546*'5#%,.5%#=557;13,=3,%10%,.5%5',*45%#)#,56
○
8
D*'5%J"("'2*'/
&##*/'*'/%?14$%"241##%?14$%#,",*1'#%*'%"%(*'5%#1%,.",%,.5%75#*457%13,=3,%*#%
"2.*5F57%"'7%,.5%=4125##
○
8
!4"75T@00%&'"()#*#
P1#,#%F#L%J5'50*,#8
Y5,%R45#5',%N"(358
R41#L%F#L%P1'#8
P"(23(",5%,.5%,1,"(%21#,#%014%5"2.%1=,*1'%"F"*("-(5%,1%)13ZL
9.*2.%1=,*1'%*#%,.5%-5#,%0*'"'2*"(()>
Y5,%J5'50*,E%,.5%0*'"'2*"(%-5'50*,%,.",%,.5%1=,*1'%?*((%)*5(7
○
R")-"2$E%.1?%(1'/%*,%?*((%,"$5%,.5%1=,*1'%,1%=")%014%*,#5(0%,.413/.%,.5%
-5'50*,#
○
!*65%N"(35%10%[1'5)E%61'5)%"F"*("-(5%*'%,.5%=45#5',%*#%?14,.%6145%,."'%
,.5%#"65%"613',%*'%,.5%03,345
○
\L
P1'#*754%,.5%H3"(*,",*F5%=41#%"'7%21'# 10%5"2.%10%,.5%1=,*1'#]L
S5(52,%,.5%-5#,%1=,*1'%*'%(*/.,%10%,.5%5F*75'25^L
Y5,%J5'50*,
!.5%0*'"'2*"(%-5'50*,%/"*'57%0416%=34#3*'/%"%#=52*0*2%*'F5#,65',%"(,54'",*F5%14%
=4125##%2."'/5
@'%"'%"''3"(%-"#*#
○
8
Y5,%-5'50*,%,"$5#%,.5%7*00545'25%-5,?55'%1'/1*'/%)5"4()%#"F*'/#%14%21',4*-3,*1'%
V2"#.%*'W%"'7%1'/1*'/%21#,#%V2"#.%13,W
8
Y5,%J5'50*,%_%O'24565',"(%J5'50*,%` O'24565',"(%P1#,8
B5(5F"',%P1#,#
P1#,#%,.",%?*((%-5%*6="2,57%"#%"%45#3(,%10%134%752*#*1'8
Y5,%-5'50*,%2"(23(",*1'#%21'#*754%"((%45(5F"',%21#,#8
O0%,.5%#"65%21#,%5I*#,#%*'%"((%1=,*1'#%,1%-5%5F"(3",57G%*,%*#%*445(5F"',%8
O'24565',"(%J5'50*,
!.5%*'245"#5%*'%0*'"'2*"(%-5'50*,#%45#3(,*'/%0416%"'%*'F5#,65',%752*#*1'%14%
*'245"#5%*'%=41732,*1'
@'()%21'#*754#%,.5%5I,4";"77*,*1'"(%-5'50*,#%"##12*",57%?*,.%"%="4,*23("4%
"(,54'",*F5
○
O'24565',"(%J5'50*,%_%a"77*,*1'"(%-5'50*,b%@B%,1,"(%'5?%-5'50*,%` 14*/*'"(%
-5'50*,
○
8
P1',4*-3,*1'
!.5%"613',%10%61'5)%6"75%1'%#5((*'/%=41732,#;#54F*25#%1'25%7*452,%21#,#%."F5%
-55'%#3-,4"2,57
A'*,%P1',4*-3,*1'%_%#5((*'/%=4*25%` F"4*"-(5%21#,
○
c%["4/*'%_%21',4*-3,*1'%d%=4*25
○
8
O'24565',"(%P1#,
!.5%*'245"#5%*'%21#,#%45#3(,*'/%0416%"'%*'F5#,65',%752*#*1'%14%*'245"#5%*'%
=41732,*1'
@'()%21'#*754#%,.5%5I,4";"77*,*1'"(%21#,#%"##12*",57%?*,.%"%="4,*23("4%
"(,54'",*F5
○
O'24565',"(%P1#,%_%a"77*,*1'"(%21#,b%@B%,1,"(%'5?%21#,%` 14*/*'"(%21#,
○
8
&(#1%21'#*754%,.5%6"4/*'"(%21#,%` ,.5%21#,%,1%=417325%1'5%6145%3'*,8
S3'$%P1#,#
[1'5)%,.",%."#%"(45"7)%-55'%#=5',%*'%,.5%="#,8
&')%752*#*1'%6"75%014%,.5%03,345%2"''1,%2."'/5%,.5%="#,8
S3'$%21#,#%"45%*445(5F"',%"'7%#.13(7%'1,%*6="2,%752*#*1'#%6"75%'1?8
R")-"2$E%+F"(3",*'/%"'%O'F5#,65',
Y557%,1%(11$%",%*'*,*"(%*'F5#,65',8
@'/1*'/%21#,#%V2"#.%13,W8
@'/1*'/%#"F*'/#%14%21',4*-3,*1'%V2"#.%*'W8
R")-"2$%_%O'*e"(%O'F5#,65',
!"#$%"&"'(#
8
M52*#*1'%f%S3==14,
A=041',%752*#*1'8
B521665'7",*1'#8
Q3"(*,",*F5%S3==14,8
Q3"',*,",*F5%S3==14,8
9.)%Y1,%,.5%&(,54'",*F5#8
B*#$#%f%B*#$%[*,*/",*1'8
P1'2(3#*1'8
Engineering Economics Framework
!"#$%&'"()#*#
+#,"-(*#.*'/%"%0123#%014%5'/*'554*'/%521'16*2#%752*#*1'#8
95%63#,%*75',*0)%,.5%23#,1654:#;#,"$5.1(754:#%'557#%-50145%14/"'*<*'/%,.5%
1=54",*1'
9.",%*#%*6=14,"',%,1%,.5%23#,1654>%&45%?5%23445',()%655,*'/%,.5*4%
'557#>
○
8
@AB%C@&DE%,1%=41F*75%,.5%4*/.,%=41732,;#54F*25G%*'%,.5%4*/.,%H3"',*,)G%",%,.5%
4*/.,%=4*25G%*'%,.5%4*/.,%=("25G%,.5%?")%,.5%23#,1654%5I=52,#%,1%4525*F5
8
J"#57%1'%,.5%23#,1654K#%'557#G%=4*14*,*<5%13,2165#L
!"#$ M5#24*=,*1' N"(35 O6=(*2",*1'
P145>
Q3"(*,) M15#%,.5%23#,1654%?"',%"%
.*/.%H3"(*,)%=41732,>
Q3"',*,) &45%,.545%5'13/.%=41732,#%
"F"*("-(5%,1%#",*#0)%23#,1654%
'557#>
R4*25 9.",%"45%,.5)%?*((*'/%,1%=")>
S54F*25 R41732,%?"44"',)G%75(*F54)G%
04"'2.*#*'/%"44"'/565',#G%
2.52$T3=#G%23#,16*<",*1'
U3'2,*1';U5",345 M15#%,.5%23#,1654%756"'7%
"')%#=52*0*2%05",345#%V"77T
1'#W>
8
R4125##%&'"()#*#%V#165%2"#5#W
9.",%"45%134%2"="2*,*5#>%J1,,(5'52$#>8
&45%,.5%2."'/5#%'525##"4)%,1%655,;#3#,"*'%756"'7>8
R4125##%U(1?%M*"/4"6
8
X5)%P1'25=,#
P"="2*,)
!.5145,*2"(E%!.5%13,=3,%,.5%5H3*=65',;#)#,56%*#%-3*(,%,1%=417325
○
@=54",*'/E%!.5%13,=3,%,.5%5H3*=65',;#)#,56%"2,3"(()%"2.*5F5#
○
8
J1,,(5'52$
!.5%#(1?5#,%#,5=%*'%,.5%=4125##
○
S=557%75,546*'5#%,.5%#=557;13,=3,%10%,.5%5',*45%#)#,56
○
8
D*'5%J"("'2*'/
&##*/'*'/%?14$%"241##%?14$%#,",*1'#%*'%"%(*'5%#1%,.",%,.5%75#*457%13,=3,%*#%
"2.*5F57%"'7%,.5%=4125##
○
8
!4"75T@00%&'"()#*#
P1#,#%F#L%J5'50*,#8
Y5,%R45#5',%N"(358
R41#L%F#L%P1'#8
P"(23(",5%,.5%,1,"(%21#,#%014%5"2.%1=,*1'%"F"*("-(5%,1%)13ZL
9.*2.%1=,*1'%*#%,.5%-5#,%0*'"'2*"(()>
Y5,%J5'50*,E%,.5%0*'"'2*"(%-5'50*,%,.",%,.5%1=,*1'%?*((%)*5(7
○
R")-"2$E%.1?%(1'/%*,%?*((%,"$5%,.5%1=,*1'%,1%=")%014%*,#5(0%,.413/.%,.5%
-5'50*,#
○
!*65%N"(35%10%[1'5)E%61'5)%"F"*("-(5%*'%,.5%=45#5',%*#%?14,.%6145%,."'%
,.5%#"65%"613',%*'%,.5%03,345
○
\L
P1'#*754%,.5%H3"(*,",*F5%=41#%"'7%21'# 10%5"2.%10%,.5%1=,*1'#]L
S5(52,%,.5%-5#,%1=,*1'%*'%(*/.,%10%,.5%5F*75'25^L
Y5,%J5'50*,
!.5%0*'"'2*"(%-5'50*,%/"*'57%0416%=34#3*'/%"%#=52*0*2%*'F5#,65',%"(,54'",*F5%14%
=4125##%2."'/5
@'%"'%"''3"(%-"#*#
○
8
Y5,%-5'50*,%,"$5#%,.5%7*00545'25%-5,?55'%1'/1*'/%)5"4()%#"F*'/#%14%21',4*-3,*1'%
V2"#.%*'W%"'7%1'/1*'/%21#,#%V2"#.%13,W
8
Y5,%J5'50*,%_%O'24565',"(%J5'50*,%` O'24565',"(%P1#,8
B5(5F"',%P1#,#
P1#,#%,.",%?*((%-5%*6="2,57%"#%"%45#3(,%10%134%752*#*1'8
Y5,%-5'50*,%2"(23(",*1'#%21'#*754%"((%45(5F"',%21#,#8
O0%,.5%#"65%21#,%5I*#,#%*'%"((%1=,*1'#%,1%-5%5F"(3",57G%*,%*#%*445(5F"',%8
O'24565',"(%J5'50*,
!.5%*'245"#5%*'%0*'"'2*"(%-5'50*,#%45#3(,*'/%0416%"'%*'F5#,65',%752*#*1'%14%
*'245"#5%*'%=41732,*1'
@'()%21'#*754#%,.5%5I,4";"77*,*1'"(%-5'50*,#%"##12*",57%?*,.%"%="4,*23("4%
"(,54'",*F5
○
O'24565',"(%J5'50*,%_%a"77*,*1'"(%-5'50*,b%@B%,1,"(%'5?%-5'50*,%` 14*/*'"(%
-5'50*,
○
8
P1',4*-3,*1'
!.5%"613',%10%61'5)%6"75%1'%#5((*'/%=41732,#;#54F*25#%1'25%7*452,%21#,#%."F5%
-55'%#3-,4"2,57
A'*,%P1',4*-3,*1'%_%#5((*'/%=4*25%` F"4*"-(5%21#,
○
c%["4/*'%_%21',4*-3,*1'%d%=4*25
○
8
O'24565',"(%P1#,
!.5%*'245"#5%*'%21#,#%45#3(,*'/%0416%"'%*'F5#,65',%752*#*1'%14%*'245"#5%*'%
=41732,*1'
@'()%21'#*754#%,.5%5I,4";"77*,*1'"(%21#,#%"##12*",57%?*,.%"%="4,*23("4%
"(,54'",*F5
○
O'24565',"(%P1#,%_%a"77*,*1'"(%21#,b%@B%,1,"(%'5?%21#,%` 14*/*'"(%21#,
○
8
&(#1%21'#*754%,.5%6"4/*'"(%21#,%` ,.5%21#,%,1%=417325%1'5%6145%3'*,8
S3'$%P1#,#
[1'5)%,.",%."#%"(45"7)%-55'%#=5',%*'%,.5%="#,8
&')%752*#*1'%6"75%014%,.5%03,345%2"''1,%2."'/5%,.5%="#,8
S3'$%21#,#%"45%*445(5F"',%"'7%#.13(7%'1,%*6="2,%752*#*1'#%6"75%'1?8
R")-"2$E%+F"(3",*'/%"'%O'F5#,65',
Y557%,1%(11$%",%*'*,*"(%*'F5#,65',8
@'/1*'/%21#,#%V2"#.%13,W8
@'/1*'/%#"F*'/#%14%21',4*-3,*1'%V2"#.%*'W8
R")-"2$%_%O'*e"(%O'F5#,65',
!"#$%"&"'(#
8
M52*#*1'%f%S3==14,
A=041',%752*#*1'8
B521665'7",*1'#8
Q3"(*,",*F5%S3==14,8
Q3"',*,",*F5%S3==14,8
9.)%Y1,%,.5%&(,54'",*F5#8
B*#$#%f%B*#$%[*,*/",*1'8
P1'2(3#*1'8
Engineering Economics Framework
!"#$%&'"()#*#
+#,"-(*#.*'/%"%0123#%014%5'/*'554*'/%521'16*2#%752*#*1'#8
95%63#,%*75',*0)%,.5%23#,1654:#;#,"$5.1(754:#%'557#%-50145%14/"'*<*'/%,.5%
1=54",*1'
9.",%*#%*6=14,"',%,1%,.5%23#,1654>%&45%?5%23445',()%655,*'/%,.5*4%
'557#>
○
8
@AB%C@&DE%,1%=41F*75%,.5%4*/.,%=41732,;#54F*25G%*'%,.5%4*/.,%H3"',*,)G%",%,.5%
4*/.,%=4*25G%*'%,.5%4*/.,%=("25G%,.5%?")%,.5%23#,1654%5I=52,#%,1%4525*F5
8
J"#57%1'%,.5%23#,1654K#%'557#G%=4*14*,*<5%13,2165#L
!"#$ M5#24*=,*1' N"(35 O6=(*2",*1' P145>
Q3"(*,) M15#%,.5%23#,1654%?"',%"%
.*/.%H3"(*,)%=41732,>
Q3"',*,) &45%,.545%5'13/.%=41732,#%
"F"*("-(5%,1%#",*#0)%23#,1654%
'557#>
R4*25 9.",%"45%,.5)%?*((*'/%,1%=")>
S54F*25 R41732,%?"44"',)G%75(*F54)G%
04"'2.*#*'/%"44"'/565',#G%
2.52$T3=#G%23#,16*<",*1'
U3'2,*1';U5",345 M15#%,.5%23#,1654%756"'7%
"')%#=52*0*2%05",345#%V"77T
1'#W>
8
R4125##%&'"()#*#%V#165%2"#5#W
9.",%"45%134%2"="2*,*5#>%J1,,(5'52$#>8
&45%,.5%2."'/5#%'525##"4)%,1%655,;#3#,"*'%756"'7>8
R4125##%U(1?%M*"/4"6
8
X5)%P1'25=,#
P"="2*,)
!.5145,*2"(E%!.5%13,=3,%,.5%5H3*=65',;#)#,56%*#%-3*(,%,1%=417325
○
@=54",*'/E%!.5%13,=3,%,.5%5H3*=65',;#)#,56%"2,3"(()%"2.*5F5#
○
8
J1,,(5'52$
!.5%#(1?5#,%#,5=%*'%,.5%=4125##
○
S=557%75,546*'5#%,.5%#=557;13,=3,%10%,.5%5',*45%#)#,56
○
8
D*'5%J"("'2*'/
&##*/'*'/%?14$%"241##%?14$%#,",*1'#%*'%"%(*'5%#1%,.",%,.5%75#*457%13,=3,%*#%
"2.*5F57%"'7%,.5%=4125##
○
8
!4"75T@00%&'"()#*#
P1#,#%F#L%J5'50*,#
8
Y5,%R45#5',%N"(35
8
R41#L%F#L%P1'#
8
P"(23(",5%,.5%,1,"(%21#,#%014%5"2.%1=,*1'%"F"*("-(5%,1%)13
ZL
9.*2.%1=,*1'%*#%,.5%-5#,%0*'"'2*"(()>
Y5,%J5'50*,E%,.5%0*'"'2*"(%-5'50*,%,.",%,.5%1=,*1'%?*((%)*5(7
○
R")-"2$E%.1?%(1'/%*,%?*((%,"$5%,.5%1=,*1'%,1%=")%014%*,#5(0%,.413/.%,.5%
-5'50*,#
○
!*65%N"(35%10%[1'5)E%61'5)%"F"*("-(5%*'%,.5%=45#5',%*#%?14,.%6145%,."'%
,.5%#"65%"613',%*'%,.5%03,345
○
\L
P1'#*754%,.5%H3"(*,",*F5%=41#%"'7%21'# 10%5"2.%10%,.5%1=,*1'#
]L
S5(52,%,.5%-5#,%1=,*1'%*'%(*/.,%10%,.5%5F*75'25
^L
Y5,%J5'50*,
!.5%0*'"'2*"(%-5'50*,%/"*'57%0416%=34#3*'/%"%#=52*0*2%*'F5#,65',%"(,54'",*F5%14%
=4125##%2."'/5
@'%"'%"''3"(%-"#*#
○
8
Y5,%-5'50*,%,"$5#%,.5%7*00545'25%-5,?55'%1'/1*'/%)5"4()%#"F*'/#%14%21',4*-3,*1'%
V2"#.%*'W%"'7%1'/1*'/%21#,#%V2"#.%13,W
8
Y5,%J5'50*,%_%O'24565',"(%J5'50*,%` O'24565',"(%P1#,
8
B5(5F"',%P1#,#
P1#,#%,.",%?*((%-5%*6="2,57%"#%"%45#3(,%10%134%752*#*1'8
Y5,%-5'50*,%2"(23(",*1'#%21'#*754%"((%45(5F"',%21#,#8
O0%,.5%#"65%21#,%5I*#,#%*'%"((%1=,*1'#%,1%-5%5F"(3",57G%*,%*#%*445(5F"',%8
O'24565',"(%J5'50*,
!.5%*'245"#5%*'%0*'"'2*"(%-5'50*,#%45#3(,*'/%0416%"'%*'F5#,65',%752*#*1'%14%
*'245"#5%*'%=41732,*1'
@'()%21'#*754#%,.5%5I,4";"77*,*1'"(%-5'50*,#%"##12*",57%?*,.%"%="4,*23("4%
"(,54'",*F5
○
O'24565',"(%J5'50*,%_%a"77*,*1'"(%-5'50*,b%@B%,1,"(%'5?%-5'50*,%` 14*/*'"(%
-5'50*,
○
8
P1',4*-3,*1'
!.5%"613',%10%61'5)%6"75%1'%#5((*'/%=41732,#;#54F*25#%1'25%7*452,%21#,#%."F5%
-55'%#3-,4"2,57
A'*,%P1',4*-3,*1'%_%#5((*'/%=4*25%` F"4*"-(5%21#,
○
c%["4/*'%_%21',4*-3,*1'%d%=4*25
○
8
O'24565',"(%P1#,
!.5%*'245"#5%*'%21#,#%45#3(,*'/%0416%"'%*'F5#,65',%752*#*1'%14%*'245"#5%*'%
=41732,*1'
@'()%21'#*754#%,.5%5I,4";"77*,*1'"(%21#,#%"##12*",57%?*,.%"%="4,*23("4%
"(,54'",*F5
○
O'24565',"(%P1#,%_%a"77*,*1'"(%21#,b%@B%,1,"(%'5?%21#,%` 14*/*'"(%21#,
○
8
&(#1%21'#*754%,.5%6"4/*'"(%21#,%` ,.5%21#,%,1%=417325%1'5%6145%3'*,8
S3'$%P1#,#
[1'5)%,.",%."#%"(45"7)%-55'%#=5',%*'%,.5%="#,8
&')%752*#*1'%6"75%014%,.5%03,345%2"''1,%2."'/5%,.5%="#,8
S3'$%21#,#%"45%*445(5F"',%"'7%#.13(7%'1,%*6="2,%752*#*1'#%6"75%'1?8
R")-"2$E%+F"(3",*'/%"'%O'F5#,65',
Y557%,1%(11$%",%*'*,*"(%*'F5#,65',8
@'/1*'/%21#,#%V2"#.%13,W8
@'/1*'/%#"F*'/#%14%21',4*-3,*1'%V2"#.%*'W8
R")-"2$%_%O'*e"(%O'F5#,65',
!"#$%"&"'(#
8
M52*#*1'%f%S3==14,
A=041',%752*#*1'8
B521665'7",*1'#8
Q3"(*,",*F5%S3==14,8
Q3"',*,",*F5%S3==14,8
9.)%Y1,%,.5%&(,54'",*F5#8
B*#$#%f%B*#$%[*,*/",*1'8
P1'2(3#*1'8
Engineering Economics Framework
hwpark22 and 40161 others unlocked
40
Business Administration 1220E Full Course Notes
Verified Note
40 documents
Document Summary
We must identify the customer"s/stakeholder"s needs before organizing the operation. Our goal: to provide the right product/service, in the right quantity, at the right price, in the right place, the way the customer expects to receive. Theoretical: the output the equipment/system is built to produce. Speed determines the speed/output of the entire system. Assigning work across work stations in a line so that the desired output is achieved and the process. Calculate the total costs for each option available to you. Net benefit: the financial benefit that the option will yield. Payback: how long it will take the option to pay for itself through the benefits. Time value of money: money available in the present is worth more than the same amount in the future. Consider the qualitative pros and cons of each of the options. Select the best option in light of the evidence. The financial benefit gained from pursuing a specific investment alternative or process change.