Knowing how the economy works is important, if you know when to pay for an approach of a project instead of the other approach, you can save a lot of money, even though they get you to the same result, one can be more expensive as the resources they use can be more expensive as well. You could choose to do it on approach A or B if they cost you the same amount at a point in time, but it could not happen.
Even when you choose the cheapest approach, there is still some uncertainty, like the economics can fall and everything starts to be more expensive, in the worst case scenario. You should always be prepared for those kind of things, you can do different types of analysis to predict the behavior of the flow of cash and prioritize what are the most important requirements or projects to start, as they can have the most value for the clients.
The engineering economics is a profession in which the knowledge of math and natural science can be applied to benefit mankind. It helps understand what economics are in a deeper meaning, helping us in making more certain and effective decisions.
The seven-step procedures used to assist the decision making are: (N, Shivam, 2019)
1. The recognition, definition and evaluation of the problem.
2. Search for potential as well as feasible alternatives.
3. Incorporating the basic cash flow approach.
4. Decision should serve the long term interest of the organisation.
5. Analysing the economic aspects of the engineering problem.
6. The preferred alternative is based on the total effort.
7. Attention to ensure feedback for improvement of operation.
References:
Engeneering Economics: Meanind adn characteristics. Recovered from: http://www.economicsdiscussion.net/engineering-economics/engineering-economics-meaning-and-characteristics/21680
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