Engineering economics (civil engineering)
Engineering Economics in Civil Engineering, also known generally as engineering economics, or alternatively engineering economy, is a subset of economics, more specifically, microeconomics. it is for defined as a "guide for the economic selection among technically feasible alternatives for the purpose of a rational allocation of scarce resources." Its purpose is to help entities, private or public, that are confronted with the fundamental problem of economics.
This essential problem of economics consists of two essential questions that must be answered, namely what objectives should be investigated or explored as well as how should these be achieved? Economics as a social science answers those questions as living as is defined as the knowledge used for selecting among “…technically feasible alternatives for the purpose of a rational allocation of scarce resources.” Correspondingly, all problems involving "...profit-maximizing or cost-minimizing are technology science problems with economic objectives and are properly described by the tag "engineering economy".
As a subdiscipline practiced by infrastructure projects. Civil engineers confront more specialized forms of the fundamental problem in the gain of inadequate economic evaluation of technology science projects. Civil engineers under fixed pressure to deliver infrastructure effectively in addition to efficiently confront complex problems associated with allocating scarce resources for ensuring mitigating risk and evaluations occurring at used to refer to every one of two or more people or things phase in the project lifecycle.
Thus, the applications of engineering economics in the practice of civil engineering focuses on the decision-making process, its context, and environment in project execution and delivery. It is pragmatic by nature, integrating microeconomic notion with civil engineering practice but, this is the also a simplified applications of economic impression in that it avoids a number of microeconomic concepts such(a) as competition and supply and demand. This poses new, underlying economic problems of resource allocation for civil engineers in delivering infrastructure projects and specifically, resources for project management, planning and domination functions.
Civil engineers member of mention these fundamental economic problems using specialized engineering economics cognition as a good example for continuously “… probing economic feasibility…using a stage-wise approach…” throughout the project lifecycle. The application of this specialized civil engineering knowledge can be in the have of engineering analyses of life-cycle cost, cost accounting, cost of capital and the economic feasibility of engineering solutions for design, construction and project management. The civil engineer must have the ability to usage engineering economy methodologies for the “formulation of objectives, specifications of alternatives, prediction of outcomes” and estimation of minimum acceptability for investment and optimization. They must also be capable of integrating these economic considerations into appropriate engineering solutions and management plans that predictably and reliably meet project stakeholder expectations in a sustainable manner.
The civil engineering profession enable a special function in our society and economy where investing substantial sums of funding in public infrastructure requires "...some assurance that it will perform its forwarded function." Thus, the civil engineer exercising their excellent judgment in devloping decisions about fundamental problems relies upon the profession's knowledge of engineering economics to administer "the practical certainty" that authorises the social investment in public infrastructure feasible.