REALTIONSHIP OF ECONOMICS AND ENGINEERING.pptx

REALTIONSHIP OF ECONOMICS AND ENGINEERING.pptx

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  REALTIONSHIP OF ECONOMICS AND ENGINEERING
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  ECONOMICS AND ENGINEERING •Economics and engineering are very closely related. • Engineering is related with the production system, meaning production of a unit at minimum possible cost. • Production system is a function of both technological and non- technological factors. Production system= f(technological factors, non- technological factors)
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  ECONOMICS AND ENGINEERING(cont..) • Non-technological factors include social structure, economic conditions of people, the cost of resources etc. Therefore, it is important for engineers to have intimate knowledge of non-technological factors too. • Having adequate knowledge of economics helps maximise social welfare as well as economic conditions. • Production engineering and industrial engineering deals with applied industrial and production economics.
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  PROCESS OF ENGINEERING ECONOMICS Analysisof wants Finding out proper solution Launching of the products Organisation of projects Designing of the project and construction of wants Supervision and operation of production Distribution of products
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  NEED OF ECONOMICSIN ENGINEERING 1. Judicious application of principles of economics The basic principle of economics is that the demands of people are unlimited while, the resources are scarce and limited and that they have alternative uses. Therefore, what resources to be applied in engineering, when and where, and understanding the consequences of this decision is of utmost importance.
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  NEED OF ECONOMICSIN ENGINEERING 2. Interpreting the relationship between inputs and output For engineers it is of utmost importance to understand the input (resources) and the output (it generates). 3. Project planning and management The knowledge of economics assists engineers in making a correct market analysis that includes demand analysis, technical analysis, estimation and measurement of risk and intricacies of the concept of budgeting.
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  NEED OF ECONOMICSIN ENGINEERING 4. Investment Management Decisions Understanding the availability of finances and determining their usage, including finding out best investment alternatives to fund a project can be done through knowledge of economics. 5. Useful in developing, testing and designing a job The concepts of economics can be applied in the process of development of a project. Studying material inputs and utilities, manufacturing process and technology, structures and civil works, projected cash flows and estimation and mitigation of risks can be analysed and applied in engineering using economics.
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  NEED OF ECONOMICSIN ENGINEERING 6. Accelerating and uniting social and technological progress Economics and engineering when applied together accelerate the social and technological progress of a nation. 7. Using cash flow and fund flow analysis accurately to interpret and analyse the profitability of a project Understanding and managing inflows and outflows of funds is done through cash flow analysis. The cash flows must always be positive for a project, meaning thereby, that outflows must exceed the inflows.
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  RELATIONSHIP OF ECONOMICSAND SOCIAL SCIENCES • Economics and Sociology: In sociology, all types of social actions of a man are studied. In economics, we study the material aspect of a man’s social actions. Eg. While a sociologist studies social institutions like marriage, religion, political institutions and economic conditions to understand the social fibre of the society, an economist studies these very aspects to understand the social condition of the society.
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  RELATIONSHIP OF ECONOMICSAND SOCIAL SCIENCES • Economics and History These subjects are closely intertwined to each other because for solution of any economic problem, the study of its historical background and the facts laid underneath are important. Eg. Analysis of GDP of a nation and the reasons behind the rise or fall of the same. Also, we make use of historical data to formulate economic laws.
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  RELATIONSHIP OF ECONOMICSAND SOCIAL SCIENCES • Economics and Politics: Economics and politics are also closely related. The political dogmas and organisations determine economic system and its functioning. Eg. Make in India campaign was aimed at encouraging the manufacture of various kind of products in India as well as boosting their sales. Also, socialism was born of economic inequalities and exploitation in England during the industrial revolution. Karl Marx is considered as the Father of (scientific) socialism.
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  RELATIONSHIP OF ECONOMICSAND SOCIAL SCIENCES • Economics and Ethics Ethics is the science of morality while, economics studies human behaviour. Economics is the science of wealth. Eg. Manufacturing of liquor may be ethically wrong but economics does study these problems. Also, companies with a net worth of more than INR 1000 crores, need to utilise a part of their spending towards Corporate Social Responsibility (CSR). This shows convergence of economics and ethics.
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  RELATIONSHIP OF ECONOMICSAND SOCIAL SCIENCES • Economics and Jurisprudence: In jurisprudence, we study the laws and constitution of a country. It must be made sure that the laws made support equitable distribution of wealth in the society and ensure overall fair environment. Economics is not safe without law and law cannot prosper without economics. Eg. In the past, foreigners used to find our taxation complex and and so relatively simpler and clearer laws were made to promote economic progress.
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  RELATIONSHIP OF ECONOMICSAND SOCIAL SCIENCES • Economics and Mathematics Economics is concerned with study of relationship between price, quantity, income, output etc. To understand and infer from these quantitative relationships, the study of mathematics is very important. Eg: Law of Demand, Law of Supply, Law of Consumption etc.
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  RELATIONSHIP OF ECONOMICSAND SOCIAL SCIENCES • Economics and psychology • Psychology is the science of mind and economics too relates to many of its aspects including the psychology of unlimited wants and limited means. Eg. To deal with labour problems, we must understand industrial psychology. Also, a good businessman must understand the psychology of buyers whenever he wants to change the price of his good and laws like law of diminishing marginal utility are based on it.
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  THANKYOU!