Introduction to Economic Decision Making for Engineers

03 4045

Midterm project grades.

The course will be taught in English in the Spring semester 2022, in conjunction with EuroTeQ. All lectures and exercise sessions will be by zoom:

https://technion.zoom.us/j/95117688370

Lectures will be held on Mondays from 14:30 to 16:30.

Exercise sessions will be held on Mondays from 16:30 to 17:30.

Detailed description (English)

Syllabus in Hebrew and English

Link to the first lecture, 21.3.2022.

Link to the 2nd lecture, 28.3.2022.

Link to the 3rd lecture, 4.4.2022.

Link to the 4th lecture, 11.4.2022.

Link to the 5th lecture, 25.4.2022.

Link to the 6th lecture, 9.5.2022.

Link to the 7th lecture, 16.5.2022.

Link to the 8th lecture, 23.5.2022.

Link to the 9th lecture, 30.5.2022.

Link to the 10th lecture, 6.6.2022.

Link to the 11th lecture, 13.6.2022.

Link to the 12th lecture, 20.6.2022.

Link to the 13th lecture, 27.6.2022.

Lecture note sections to be covered (links to Lecture Notes below)

  • Time-Value of Money, pp.3-15: time-value of money. Done.
  • Time-Value of Money, pp.16-21: applications of time-money relations. Done.
  • Time-Value of Money, pp.22-25:  uncertain profit rate, i. Done.
  • Time-Value of Money, pp.26-31: uncertain yearly profit, A. Done.
  • Time-Value of Money, pp.32-33: uncertain i and A. Done.
  • Time-Value of Money, pp.34-43: present and future worth with uncertainty. Done.
  • Time-Value of Money, pp.44-51: strategic uncertainty. Done.
  • Time-Value of Money, pp.52-56: opportuneness. Done.
  • Benefit-Cost Ratio,  pp.2-4: incommensurate benefits and costs. Done.
  • Benefit-Cost Ratio,  pp.5-18: monetizing the benefit-cost ratio. Done.
  • Benefit-Cost Ratio,  pp.19-32: BCR with incommensurate benefits and costs. Done.
  • Price Changes, p.4: consumer price index. Done.
  • Price Changes, pp.6-12: nominal and real prices. Done.
  • Price Changes, pp.13-26: engineering decisions with inflation. Done.
  • Price Changes, pp.26-37: foreign exchange rates. Done.
  • Portfolio management, pp.2-3: mean-variance analysis. Done.
  • Portfolio management, pp.4-9: info-gap extension of mean-variance analysis. Done.
  • Portfolio management, pp.10-18: value at risk. Done.
  • Forecasting, pp.2-19. Done to p.9.
  • Special Topic 1: Behavioral response to feedback (ro02.pdf, section 17).
  • Special Topic 2: Strategic asset allocation (ro02.pdf, section 15).

Lecture Notes

Money-Time Relationships and Their Applications

The Benefit-Cost Ratio

Price Changes Inflation and Foreign Exchange

Portfolio Management

Forecasting

Behavioral Response to Feedback

Strategic Asset Allocation

Exercises

Homework exercises on Economic Decision Making for Engineers

Homework exercises on  Info-Gap Risks in Project Management

Homework #1: Problems 1-5. Problem statements and solutions.

Homework #2: Problems 9, 11. Problem statements and solutions.

Homework #3: Problem 12. Problem statement and solution.

Homework #4: Problem 28. Problem statement and solution.

Homework #5: Problem 13, a,b (and c). Problem statement and solution.

Homework # 6: Problem 15. Problem statement and solution.

Homework # 7: Problems 18 and 19. Problem statements and solutions.

Homework # 8: Problem 20. Problem statement and solution.

Homework #9: Problem 21. Problem statement and solution.

Homework # 10: Problems 35, 36. Problem statesments and solutions.

Homework #11: Problem 23 (a), (d) and (e). Problem statement and solution.

Homework #12: Problems 5, 6, 4a in Info-Gap Risks in Project Management. Problem statements and solutions.

Homework #13. Problem 86 (a)-(c) in Problem Set on Robustness and Opportuneness. Problem Statement and solution.