Readings
Notes on several readings topics are provided as part of the class.
Notes on Equivalence of Cash Flows (PDF)
Notes on Infrastructure Costs (PDF)
Notes on NPV Analysis for a Major CEE Project (PDF)
Supplemental readings on topics covered in the class are provided in the following file (PDF), and the full list of readings for the semester is in the table below.
Required Text
Sullivan, William, James Luxhoj, and Elin Wicks. Engineering Economy. 12th ed. Upper Saddle River, NJ: Prentice Hall, 2002. ISBN: 0130673382.
| SES # | TOPICS | READINGS |
|---|---|---|
| Part I: Introduction to CEE Projects | ||
| L1 | Class Overview: CEE Projects and Sustainable Development | |
| R1 | Recitation: Introduction to Spreadsheets | |
| L2 | Mobility in the 19th Century: Roads, Canals, and Railroads | Sullivan, William, James Luxhoj, and Elin Wicks. Chapter 1 in Engineering Economy. Wood, F. J. The Turnpikes of New England. Pepperell, MA: Branch Line Press, Abridged edition. ISBN: 0942147057. (Selection and summary by C. D. Martland.) |
| L3 | Panama Canal Case Study | |
| R2 | Recitation: Panama Wrap-Up | |
| Part II: Time and Money | ||
| L4 | Cost Concepts and Design Economics | Sullivan, William, James Luxhoj, and Elin Wicks. Chapter 2 in Engineering Economy. Drapeau, Raoul. "Pipe Dream: With Creative Engineering and Heroic Endurance, Freezing, Beleaguered Workers Pushed the Canol Pipeline through the Brutal Arctic Wilderness during World War II. But it was a project that should never have been started." Invention and Technology (Winter 2002): 25-35. |
| L5 | Cost Concepts and Design Economics (cont.) | |
| R3 | Recitation | |
| L6 | Time and Money: The Principle of Equivalence | Sullivan, William, James Luxhoj, and Elin Wicks. Chapter 3.1-3.10 in Engineering Economy. Notes on Infrastructure Economy. |
| L7 | Time and Money: Nominal and Effective Interest Rates and Continuous Compounding | Sullivan, William, James Luxhoj, and Elin Wicks. Chapter 3.16-3.23 in Engineering Economy. |
| R4 | Recitation: Intro to Time-Value of Money | |
| L8 | Choosing a Discount Rate | Sullivan, William, James Luxhoj, and Elin Wicks. Chapter 4.1-4.2, 8.1-8.23, 11.6, and 14.1-14.5 in Engineering Economy. Notes on NPV Analysis for a Major CEE Project. |
| L9 | Equivalent Methods for Comparing Benefits and Costs (Basic Methods - PW, FW, AW, IRR, ERR) | Sullivan, William, James Luxhoj, and Elin Wicks. Chapter 4.3-4.12 in Engineering Economy. |
| R5 | Recitation: Quiz Review Term Project Preparation Follow-Up Details | |
| L10 | Quiz (basic cost concepts; breakeven analysis; equivalence; choice of discount rates; motivation for projects) | |
| Part III: Evaluating Alternatives | ||
| L11 | Comparing Alternatives | Sullivan, William, James Luxhoj, and Elin Wicks. Chapter 5 in Engineering Economy. Dorfman, Robert. "Why Benefit-Cost Analysis is Widely Disregarded and What to Do about It." Interfaces 26, no. 5 (September-October 1996): 1-6. E. Alfred Picardi. "High Rise Buildings and 911." (Unpublished.) |
| R6 | Multiple Perspectives - Public vs. Private Projects | Sullivan, William, James Luxhoj, and Elin Wicks. Chapter 11 in Engineering Economy. Misiak, J. "Federation Square: Masterpiece… or Publicly Funded Folly." (Unpublished.) |
| L12 | Multiple Decision Criteria | Sullivan, William, James Luxhoj, and Elin Wicks. Chapter 15 in Engineering Economy. Stewart, Theodor J. "Thirsting for Consensus: Multicriteria Decision Analysis Helps Clarify Water Resources Planning in South Africa." OR/MS Today (April 2003): 30-34. |
| L13 | Rules of the Game: How Taxes and Regulations Influence Project Evaluation | Sullivan, William, James Luxhoj, and Elin Wicks. Chapter 6 in Engineering Economy. |
| R7 | Recitation - Discuss Project Topics Quiz 2 | |
| Part IV: Assessing Sustainability | ||
| L14 | CEE Projects and Public Needs: Accessibility How effectively will the proposed projects or program address their objectives? Will there be enough money to pay the bills? | Acharya, Dharma. "Kathmandu-Hetauda in an Hour: Some Viable Alternatives." Nepal Update 3, no. 4, Washington DC, (December 1992). This is a concise discussion of the potential costs and benefits of constructing a new, much less circuitous road to link Nepal and India; the paper uses rough estimates of unit costs for building roads and tunnels and for operating highway vehicles; there is a summary of financial, social, and political issues, plus some discussion concerning political issues. |
| L15 | CEE Projects and Public Needs: Water and Transportation Projects in Tianjin, China (Jodie Misiak) | |
| R8 | Recitation | |
| L16 | Environmental Impact Assessment of CEE Projects (Susan Murcott) How important are the externalities associated with proposed projects or programs? Can the environment and society withstand the changes? | World Bank. "Integrated Coastal Zone Management Strategy for Ghana." in Findings (Africa Region, Number 113, June 1998). Capano, Daniel E. "Chicago's War With Water: On its Way to Pioneering Our Modern Sewer System, Chicago Survived Epidemics, Floods, and Countless Bad Days." Invention and Technology (Spring 2003): 51-58. |
| L17 | Environmental Impact Assessment |
Sheridan, Thomas E. "The Big Canal: The Political Ecology of the Central Arizona Project." In Water, Culture and Power. Edited by John M. Donahue, and Barbara R. Johnston. Washington, DC: Island Press, 1998. ISBN: 1559635215. |
| R9 | Recitation: Environmental Impact Assessment | |
| L18 | Social Impact Assessment (Susan Murcott) | "The Arsenic Controversy." Regulation (Fall 2001): 42-54. Sturdy, cheap water filter for Nepal wins World Bank Prize. |
| L19 | Dealing with Uncertainty - Sensitivity Analysis, Scenarios, Partnerships How can we modify a project or a program to make it more sustainable, i.e. more effective and less disruptive to the environment and to society? | Sullivan, William, James Luxhoj, and Elin Wicks. Chapter 10, and 13 in Engineering Economy. Mobasheri, Fred, Lowell H. Orren, and Fereidoon P. Sioshansi. "Scenario Planning at Southern California Edison." Interfaces 19, no. 5 (September-October 1989): 31-44. In planning how best to expand capacity, the electric company considered 12 scenarios that might affect supply or demand for electricity. Schwartz, Peter. "Steps to Developing Scenarios." Appendix to Art of the Long View. New York, NY: Currency Publishers, 1996. ISBN: 0385267320. |
| R10 | Recitation | |
| L20 | Improving Projects and Programs: Reducing risks, reducing costs, more equitable sharing of benefits, reducing negative social or environmental impacts, improving quality | Zoellner, Tom. "Oil and Water: The Adventure of Getting One from Deep Beneath the Other." Invention and Technology (Fall 2000). Heppenheimer, T. A. "Nuclear Power: Engineers Finally Made it Safe, but They Couldn't Make it Cheap." Invention and Technology (Fall 2002). Hall, Sir Peter. "High Speed Rail Comes to London." Access 19 (Fall 2001). |
| R11 | Quiz (Ranking mutually independent alternatives; using depreciation and taxes to promote public policy; cost effectiveness; assessing sustainability issues) | |
| Part V: CEE Project Reports | ||
| L21 | How to critique a project: Planning your presentation, structuring a project report, and writing an executive summary | |
| L22 | The Interstate Highway System: Vision, Design, and Impacts (20-minute presentation followed by class discussion of sustainability issues related to highways) | Reich. "The Dawn of the Truck." Invention and Technology (Fall 2002): 18-25. "Highway Infrastructure Preservation." Set of articles from TRB News 228 (October 2003). |
| R12 | Recitation: Time available for coordination of project presentations | |
| L23 | Recitation: Time available for coordination of project presentations (cont.) | |
| L24 | Project Presentations | |
| R13 | Project Presentations (cont.) | |
| L25 | Project Presentations (cont.) | |
| L26 | Project Presentations (cont.) | |
