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HW 1

This document contains instructions for a take-home quiz in an engineering economy course. It includes 4 problems related to demand curves, equipment costs over time, engineering hours for tower design with experience gains, and determining breakeven and profit-earning selling prices for construction projects based on historical cost data and indexes. Students are instructed to show their work, save as PDF, and submit by the deadline for grading.

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Nizar Mousa
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
21 views

HW 1

This document contains instructions for a take-home quiz in an engineering economy course. It includes 4 problems related to demand curves, equipment costs over time, engineering hours for tower design with experience gains, and determining breakeven and profit-earning selling prices for construction projects based on historical cost data and indexes. Students are instructed to show their work, save as PDF, and submit by the deadline for grading.

Uploaded by

Nizar Mousa
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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The University of Jordan

School of Engineering
Civil Engineering Department
CE 0901420 Engineering Economy Fall, 2023 – 2024
Take-home Quiz 1 Due Date: November 15, 2023
Name: Student Number:

Instructions
- This assignment is worth 15 points and is intended to cover chapters 2 and 3 of the
Engineering Economy course.
- This is an individual assessment (no groups), and any signs of cheating will result in a zero
score for this assignment and may result in an F grade in the class.
- Use this Microsoft Word File by typing any necessary equations, formulas, or text onto
the same file, and make sure that your work is well-organized and presented neatly. Messy
work will not receive the full mark even if the math is correct.
- Print your name/student ID, save the file as PDF, and upload it to eLearning (scanned
copies will not be accepted).
- The deadline is at 23:55 on November 15, 2023. Late submissions will receive a zero score.

Problem 1
A lash adjuster keeps the pressure constant on engine valves, increasing automobile engines' fuel
efficiency. The relationship between price (p) and monthly demand (D) for lash adjusters made by
the Wicks Company is given by this equation: D = (2,000 − p)/0.10.
a) What is the demand (D) when total revenue is maximized?
b) What important data are needed if maximum profit is desired?

Problem 2
Six years ago, an 80-kW diesel-electric set cost $160,000. The cost index for this class of
equipment six years ago was 187 and is now 194. The plant engineering staff was considering a
120-kW unit of the same general design to power a small isolated plant that would have cost
$211,707.
Based on the information above the plant engineering staff is considering a 100-kW unit of the
same general design to power a small isolated plant. Assume we want to add a pre-compressor,
which (when isolated and estimated separately) currently costs $13,000. Determine the total cost
of the 100-kW unit.
Problem 3
The structural engineering design section within the engineering department of a regional electrical
utility corporation has developed several standard designs for a group of similar transmission line
towers. The detailed design for each tower is based on one of the standard designs. A transmission
line project involving 50 towers has been approved. The estimated number of engineering hours
needed to accomplish the first detailed tower design is 126. Assuming a 95% learning curve.
What is your estimate of the number of engineering hours needed to design the eighth tower and
to design the last tower in the project?

Problem 4
A construction company is planning their projects for the year 2023. The company is considering
the construction of 18 buildings, each is 2,900 m2. In 2018, they have built similar buildings but
with smaller areas, and the material costs associated with those buildings are shown in the
following table:
Building # Area (m2) Cost ($)
1 1,430 311,812
2 1,475 313,744
3 1,655 331,893
4 1,790 339,479
5 1,961 356,153
6 2,015 359,265
7 2,375 383,146
8 2,533 385,265

The materials cost index values are as shown in the following table:
Year Cost index
2017 321
2018 332
2019 348
2020 368
2021 379
2022 398
2023 406
In the past couple of years, the company began constructing larger units (2,900 m2 units compared
to those in 2018 as shown in the first table). The labor hours required to complete the first 2,900
m2 unit back then was 24,000 hours but the labor hours decreased exponentially with time due to
the experience gained by workers at a 90% learning slope until reaching the 15th unit, after which
a steady-state was reached. Assume the 2023 average labor wage is $20 per hour and the
Company’s fixed annual cost (overhead) is $2,300,000.
(a) What is the breakeven selling price per unit?
(b) What is the selling price per unit assuming the company wishes to earn 10% profit on top of
the total costs incurred?

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