Department of Civil and Environmental Engineering

GDB 3023 ENGINEERING ECONOMY AND

ENTREPRENEURSHIP
JAN 2020

ASSIGNMENT 2
Group 19
Name ID
WONG KAI WING 23874
MUHAMMAD AFIQ AIMAN BIN MOHD 23930
ZAHID
NG YEE YONG 23946
RAY LOUIS VICMARK RICHARD 23933
NURBAZILAH BINTI AZMI 23867
2-3
1000000 miles/ year
a) Cows = =182.6 ≈ 183 cow
(365 days / year )(15 miles/day)

Annual cost = (1000000 miles/year)($5/ 60 miles) = $83.33 per year

1000000mles / year
b) Annual cost of gasoline = ×($ 3/ gallon) = $100,000 per year
30 miles/ gallon

An extra of $ 16,667 more per year to fuel the car with gasoline

2-4
Site A
Rental = 5000
Hauling = (4) (200,000) (1.5) = 1,200,000
Total = 1,200,000 + 5000 = 1,205,000

Site B
Rental = 100,000
Hauling = (3) (200,000) (1.5) = 900,000
Total = 900,000 + 100,000 = 1,000,000

 To maximize the profit, we can minimize the total cost. Therefore, site B is a better
option in terms of generating a larger profit margin.
2-13
p = 150 – (0.01 × D)

C F = $50,000

cv = $40/unit

Answer:

D* = (a – cv)/2b

= (150 – 40)/2(0.01)

= 5500

Use, Profit = -bD2 + (a – cv) D – C F

= -(0.01)(5500)2 + (150 – 40) × 5500 – 50,000

= $252,500

Price, p = 150 – (0.01 × 5500)

=95 unit/year
2-15
2700 5000
(
(a) Profit = 38+
D )
− 2 D−1000−40 D
D
5000
= 38D + 2700 - -1000-40D
D
5000
=-2D- +1700
D
d ( Profit) 5000
=¿-2+ 2 =0
dD D

D2=2500

D=50

D= 50 units per months

d 2 ( Profit ) −10,000
(b) = < 0 for D >2 1
d D2 D3

Therefore, D= 50 is the point of maximum profit.

2-29
(a)
CI
C= +C R λt
λ

dC −C I
= 2 +C R t
dλ λ
−C I
+C R t=0
λ2

CI
2
λ= ( )
CR t
 1 /2
CI
¿
λ= ( )
C Rt

dC −C I
(b) = 2 +C R t
dλ λ

d2C 2 CI
= 3
d λ2 λ

2C I
>0 for λ>0
λ3
Equation in part (a) correspond to a minimum life-cycle cost of system failure.

(c) Investment cost versus total repair cost