After successfully completing the course, students will;
- understand the basic theoretical concepts in Cost Management Engineering like cash flows, cost estimation and project input / output valuation techniques, Discounted Cash Flow analysis methods, cost of capital / choice of discount rate;
- understand the basic problems and modeling techniques regarding uncertainty in long-horizon investment decisions or projects, and will have a basic understanding to cope fruitfully with informational challenges connected to this uncertainty;
- be able to apply and integrate these concepts and techniques to perform basic economic evaluations of private sector and public sector projects;
- have insight in several important differences in private and public sector projects and resulting differences in approach for the economic evaluation of private and the public sector projects;
- have insight in important differences in the quality of financial data and be able to weigh their importance critically;
- be aware of multi-attribute analysis as an alternative approach evaluation of projects and be able to use this method for (simplified) project evaluation;
- be able to comment critically on the theoretical and practical validity of recommendations by third parties regarding investment decisions and surrounding issues as discussed;
- be able to investigate applications of approaches taught independently and report their findings in writing.
The course objective is to provide engineering students with the theoretical understanding and practical approaches as well as the tools and techniques for the economic and financial evaluation of stand-alone but also competing design solutions for processes, products, construction projects, services and the practical application of the approaches in more complex settings. Engineers must be able to model the economic impacts of their recommendations during the life cycle of a project (widely interpreted). The course will focus on monetary quantification, using different system boundaries and perspectives. Students are challenged to go out and gather information on real-life applications of cost management and engineering techniques.
Teaching methods, assessment and language:
The course will use lectures and group assignments and self-study. The lectures will be a mix of instruction and some working on exercises. The students will also do independent research on subjects strictly related to the course. Subjects will be proposed in case students are at a loss about where to start, but it is strongly preferred that the students search a subject of their interest. This research activity takes place in a group and the group will write a report. The assessment and grading system will explained in more detail during the first lecture if necessary. By the way, the written examination consists of a mix of numerical questions and theoretical ones mainly related to the former. You may use a standard calculating device.
1. Written examination after the course 60% (minimum grade 5.0)
2. The paper 40%
The assessment and grading system will explained in more detail during the first lecture if necessary.