Advanced Cost and Value Analysis
|Course Number:||ENGRG 7830|
|Course Name:||Advanced Cost and Value Analysis (Online)|
|Course Description:||Introduction to the concepts of value within the manufacturing environment. Investigation of various methods of increasing value and defining value are considered. Emphasis is on creating value for the customer through application of sound economic analysis and manufacturing methods improvements. Value Engineering including function analysis. Value Stream Mapping and 5S applications are studied in the context of Lean Manufacturing methods.|
Master of Science in Engineering
Master of Science in Project Management
Master of Science in Integrated Supply Chain Management
NOTE: The information below is representative of the course and is subject to change. The specific details of the course will be available in the Desire2Learn course instance for the course in which a student registers.
Upon completion of this course, you should be able to
- Discuss engineering decision making.
- Provide practice in economic decision making.
- Introduce concepts and practices in value engineering.
- Discuss varied approaches to adding and defining value.
Unit 1: Value and Cost Analysis - The Basics
Using economic factors to make business or personal decisions has long been accepted as sound practice. Most of the techniques are well-practiced and studied. Today's successful companies will not gamble on a project unless it can be shown to have a positive economic impact.
For individuals, these techniques are widely employed when planning for retirement, home mortgages, or automobile loans. Investing has become a common topic of conversation as many reel from the stock market in the past few years. In previous generations, planning for retirement was postponed until at least the age of thirty. Now, it is not uncommon to find undergraduates evaluating the relative merits of investment plans!
This practice underscores the need for sound economic study to determine the "best" of business alternatives that satisfy the needs of the consumer and provide real value. Whether the objective is to determine the most economical means of replacing a roof, updating a factory, or building a new plant, determining the economic merits of varied plans facilitates the decision process.
Fortunately for us, many of the same techniques that we use in determining when or whether to replace our car with a newer model can also be used to determine the point at which we should replace our computer systems or milling machines at work. The same factors come into play in either case: that is, we must consider our other options for investing, the probable costs of continuing with our current equipment, and all costs associated with replacement and disposal of old equipment.
Unit 1 adds the larger framework of the Value Methodology to the traditional economic analysis approach. The Value Methodology (VM) is a systematic process used by a multidisciplinary team to improve a product, service, or project through the analysis of the related functions. This includes a logical structure for the functional analysis of a project or process. One of the results is the identification of unnecessary costs of a project.
Applying the VM techniques have a proven track record of reductions in capital requirement and operational expenses, coupled with increases in net present value and other project metrics.
Unit 2: The Real World Impacts
An organization should expect the highest return on investment possible from any project; this includes the engineering work done in the creation and selection of a project. Therefore, an engineer should use the best tools for the job. Intelligence and clear thinking is the best tool for most of what is done in this course, the rest should be done by calculator or spreadsheet. It is important to become proficient with spreadsheets (examples and demonstrations in this course will use Microsoft Excel) and the functions specific to the topics covered in this courses. Review Appendix A for explanations of important uses of Excel.
Unit 3: Getting Value from Value Engineering
Although the Value Engineering and Engineering Ecomony processes themselves are important, the information regarding team composition, coordination, and organization is also important - just using the engineering economy, VE, and FAST techniques will not be effective without the supporting structure and an effective linkage to many of the surrounding process management frameworks and activities.
Grading Criteria for Activities
|Homework Group Discussion Activities (12)||25%|
|A||90% - 100%|
|B||80% - 89%|
|C||70% - 79%|
|D||60% - 69%|
|F||0% - 59%|