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    Mirpur University of Science and Technology: Deparment Software Engineering

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    ahsan
    1. The document provides an overview of the Software Engineering Economics course including course details, learning outcomes, and topics to be covered such as economic analysis techniques, cost estimation, and issues in cost estimation for software applications. 2. It discusses key concepts in engineering economic decisions like rational decision making, predicting the future, the role of engineers in business, and factors of time and uncertainty. 3. Various types of strategic engineering economic decisions are presented including service improvement, equipment selection, replacement, new products, cost reduction, and examples are given.

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    Mirpur University of Science and Technology: Deparment Software Engineering

    Uploaded by

    ahsan
    49 views24 pages
    1. The document provides an overview of the Software Engineering Economics course including course details, learning outcomes, and topics to be covered such as economic analysis techniques, cost estimation, and issues in cost estimation for software applications. 2. It discusses key concepts in engineering economic decisions like rational decision making, predicting the future, the role of engineers in business, and factors of time and uncertainty. 3. Various types of strategic engineering economic decisions are presented including service improvement, equipment selection, replacement, new products, cost reduction, and examples are given.

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    SEE Lecture 01

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    1. The document provides an overview of the Software Engineering Economics course including course details, learning outcomes, and topics to be covered such as economic analysis techniques, cost estimation, and issues in cost estimation for software applications. 2. It discusses key concepts in engineering economic decisions like rational decision making, predicting the future, the role of engineers in business, and factors of time and uncertainty. 3. Various types of strategic engineering economic decisions are presented including service improvement, equipment selection, replacement, new products, cost reduction, and examples are given.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    49 views24 pages

    Mirpur University of Science and Technology: Deparment Software Engineering

    Uploaded by

    ahsan
    1. The document provides an overview of the Software Engineering Economics course including course details, learning outcomes, and topics to be covered such as economic analysis techniques, cost estimation, and issues in cost estimation for software applications. 2. It discusses key concepts in engineering economic decisions like rational decision making, predicting the future, the role of engineers in business, and factors of time and uncertainty. 3. Various types of strategic engineering economic decisions are presented including service improvement, equipment selection, replacement, new products, cost reduction, and examples are given.

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    © All Rights Reserved
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    of 24

    MIRPUR UNIVERSITY OF SCIENCE AND TECHNOLOGY

    DEPARMENT OF SOFTWARE ENGINEERING

    SE-361 Software Engineering Economics 1


    Engineering Economic Decisions
    (Lecture # 01)
    CLO PLO
    1 1

    Engr. Samina Fazilat


    (Junior Lecturer)

    SE-361 Software Engineering Economics


    Date: 2
    Dishonesty, Plagiarism

    All parties involved in any kind of cheating in any exam (Quizzes,


    Assignments & Projects) will get their respective test cancelled
    right away.

    SE-361 Software Engineering Economics 3


    About Course
    • Course Title: Software Engineering Economics
    • Course Code: SE-361
    • Credit Hours: 03 (03 hours Per Week)
    • Grading Criteria
    • Quizes 10%(15 marks)
    • Assignments 10%(15 marks)
    • Mid –Term 30%(45 marks)
    • Final 50%(75 marks)
    • Total 100%(150 marks)

    SE-361 Software Engineering Economics 4


    Course Learning Outcomes (CLOs)

    At the end of the course the students will be able to: Domain PLO

    1. Overview economic analysis techniques and their applicability to software


    engineering C-2 1

    2. Develop software cost estimation skills using industry standards.


    C-3 3

    3. Critically evaluate and discuss the issues in cost estimation of different


    applications in the real world with course participants and learners. C-5 4

    SE-361 Software Engineering Economics 5


    Engineering Economics Overview
    • Rational Decision-Making Process
    • Economic Decisions
    • Predicting Future
    • Role of Engineers in Business
    • Large-scale engineering projects
    • Types of strategic engineering economic decisions

    SE-361 Software Engineering Economics 6


    Rational Decision-Making Process

    1. Recognize a decision problem


    2. Define the goals or objectives
    3. Collect all the relevant information
    4. Identify a set of feasible decision
    alternatives
    5. Select the decision criterion to use
    6. Select the best alternative

    SE-361 Software Engineering Economics 7


    Which Car to Lease? Saturn vs. Honda

    1. Recognize a decision • Need a car


    problem
    2. Define the goals or • Want mechanical
    objectives security
    3. Collect all the relevant • Gather technical as well
    information as financial data
    4. Identify a set of feasible • Choose between
    decision alternatives Saturn and Honda
    5. Select the decision • Want minimum total
    criterion to use cash outlay
    6. Select the best alternative • Select Honda

    SE-361 Software Engineering Economics 8


    Financial Data Required to Make an Economic Decision

    SE-361 Software Engineering Economics 9


    Engineering Economic Decisions

    Manufacturing Profit

    Planning Investment

    Marketing
    SE-361 Software Engineering Economics 10
    Predicting the Future

    • Estimating a Required
    investment
    • Forecasting a product demand
    • Estimating a selling price
    • Estimating a manufacturing cost
    • Estimating a product life

    SE-361 Software Engineering Economics 11


    Role of Engineers in Business

    Create & Design

    • Engineering Projects

    Analyze Evaluate Evaluate

    • Production Methods • Expected • Impact on


    • Engineering Safety Profitability Financial Statements
    • Environmental Impacts • Timing of • Firm’s Market Value
    • Market Assessment Cash Flows • Stock Price
    • Degree of
    Financial Risk

    SE-361 Software Engineering Economics 12


    Accounting Vs. Engineering Ecom.

    Evaluating past performance Evaluating and predicting future events

    Accounting Engineering Economy


    Past Future
    Present

    SE-361 Software Engineering Economics 13


    Two Factors in Engineering Economic Decisions

    The factors of time and uncertainty


    are the defining aspects of any
    engineering economic decisions

    SE-361 Software Engineering Economics 14


    A Large-Scale Engineering Project

    • Requires a large sum of investment


    • Takes a long time to see the
    financial outcomes
    • Difficult to predict the revenue and
    cost streams
    (Remember Cash flow discussed earlier)

    SE-361 Software Engineering


    15
    Economics
    Types of Strategic Engineering Economic Decisions
    in Manufacturing Sector

    • Service Improvement
    • Equipment and Process Selection
    • Equipment Replacement
    • New Product and Product Expansion
    • Cost Reduction

    SE-361 Software Engineering Economics 16


    Service Improvement
     How many more jeans would Levi need to sell to justify the cost of additional robotic
    tailors?

    SE-361 Software Engineering


    17
    Economics
    Equipment & Process Selection

    • How do you choose between the Plastic SMC and the Steel
    sheet stock for an auto body panel?
    • The choice of material will dictate the manufacturing process for
    an automotive body panel as well as manufacturing costs.

    SE-361 Software Engineering Economics 18


    Which Material to Choose?

    SE-361 Software Engineering Economics 19


    Equipment Replacement Problem

    • Now is the time to replace the old


    machine?
    • If not, when is the right time to
    replace the old equipment?

    SE-361 Software Engineering Economics 20


    New Product and Product Expansion

    • Shall we build or acquire a new


    facility to meet the increased
    demand?
    • Is it worth spending money to
    market a new product?

    SE-361 Software Engineering Economics 21


    Example - MACH 3 Project

    • R&D investment: $750 million


    • Product promotion through
    advertising: $300 million Gillette’s MACH3
    • Priced to sell at 35% higher Project
    than Sensor Excel (about $1.50
    extra per shave).
    • Question 1: Would consumers
    pay $1.50 extra for a shave
    with greater smoothness and
    less irritation?
    • Question 2: What would
    happen if the blade
    consumption dropped more
    than 10% due to the longer
    blade life of the new razor?

    SE-361 Software Engineering Economics 22


    Cost Reduction

    • Should a company buy equipment


    to perform an operation now done
    manually?
    • Should spend money now in order
    to save more money later?

    SE-361 Software Engineering Economics 23


    THANKS

    SE-361 Software Engineering Economics 24

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