Thanks to visit codestin.com
Credit goes to www.scribd.com

0% found this document useful (0 votes)
47 views18 pages

Module 1: The Field of Engineering Management

This document provides an introduction to the field of engineering management. It discusses the various functions engineers perform, from research and design to construction, sales, consulting, teaching and management. As engineers take on management roles, people skills become increasingly important. The document defines engineering management and the management process. It explains that engineering managers must combine technical knowledge with the ability to organize workers, materials, machinery and finances. Effective management requires skills in planning, organizing, leading and controlling resources to achieve objectives.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
47 views18 pages

Module 1: The Field of Engineering Management

This document provides an introduction to the field of engineering management. It discusses the various functions engineers perform, from research and design to construction, sales, consulting, teaching and management. As engineers take on management roles, people skills become increasingly important. The document defines engineering management and the management process. It explains that engineering managers must combine technical knowledge with the ability to organize workers, materials, machinery and finances. Effective management requires skills in planning, organizing, leading and controlling resources to achieve objectives.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 18

UNIVERSITY OF LA SALETTE,INC

COLLEGE OF ENGINEERING AND ARCHITECTURE


SANTIAGO CITY, PHILIPPINES

Module 1: The Field of Engineering Management


Introduction
Engineers are expected to perform a variety of tasks depending on their specialization and job
level. It is important to the engineer that he knows what is expected of him so that he may be able to
perform his job effectively and efficiently. His next concern will be to identify the skills required but
which he does not have. As engineers are not trained to directly deal with people, it is expected that
their weakness will most often be on people-based skills. This difficulty will be more apparent once
they are assigned to occupy management positions. It follows that if the engineer manager would want
to do his job well, some exposure to engineering management activities becomes necessary.

Learning Outcomes
At the end of this module, you are expected to
a. elaborate engineering management and the process of management;
b. discuss the function of the engineer and the organization management skills required;
c. define decision making and its process; and
d. apply quantitative models for decision making.
Preassessment:
Instruction: Answer the following questionnaire based on your personal and honest views as there are no
wrong answers.
1. Why are engineers considered an important segment of the society?

2. What are expected of engineers in general?

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
1
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

Lecture
Topic 1: Functions of the Engineer
Since prehistoric times, mankind has benefited from the various tools, equipment, and projects
developed by engineers.' Among these are the following:

1. 6000 to 3000 B.C - the stone bladed axe which was a very useful tool; and the irrigation
system used to promote crop growing.
2. 3000 to 600 B.C - the pyramids of Egypt
3. 600 B.C. to 400 A.D. - roadbuilding by the Romans
4. 100 A.D. to 1600 A.D. - the production of paper and gunpowder by the Chinese
5. 1601 A.D. to 1799 A.D - the production of steam engine and the spinning and weaving
machinery -.; and
6. the manufacture of cars and household appliances modern times.

A listing of all useful tools, equipment, and projects developed and produced by engineers will be
sufficient to produce volumes of books. These contributions indicate that engineers have become an
indispensable segment of the world's professions. This expectation will continue for a long time.

Even as engineers are currently producing solutions to many of the difficulties faced by mankind,
much is still expected of them. Their outputs, new or improvements of old ones, are very much needed
in the following specific problem concerns:

1. the production of more food for a fast-growing world population;


2. the elimination of air and water pollution;
3. solid waste disposal and materials recycling;
4. the reduction of noise in various forms;
5. supplying the increasing demand for energy;
6. supplying the increasing demand for mobility;
7. preventing and solving crimes; and
8. meeting the increasing demand for communication facilities.

Specifically, the functions of engineering encompass the following areas:

1. Research - where the engineer is engaged in the process of learning about nature and codifying
this knowledge into usable theories.
2. Design and development -- where the engineer undertakes the activity of turning a product
concept to a finished physical item. Design for manufacturability and value engineering teams
(a feature of some companies) are charged with improvement of designs and specifications at
the research, development, design, and production stages of product development."
3. Testing - where the engineer works in a unit where new products or parts are tested for work
ability.
4. Manufacturing -- where the engineer is directly in charge of production personnel or assumes
responsibility for the product.
5. Construction - this is where the construction engineer (a civil engineer) is either directly in
charge of the construction personnel or may have responsibility for the quality of the
construction process.

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
2
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

6. Sales - where the engineer assists the company's customers to meet their needs, especially those
that require technical expertise.
7. Consulting - where the engineer works as consultant of any individual or organization
requiring his services.
8. Government - where the engineer may find employment in the government performing any of
the various tasks in regulating, monitoring, and controlling the activities of various institutions,
public or private.
9. Teaching - where the engineer gets employment in a school and is assigned as a teacher of
engineering courses. Some of them later become deans, vice presidents, and presidents.
10. Management - where the engineer is assigned to manage groups of people performing specific
tasks.

Engineer in Various Types of Organization

From the viewpoint of the engineer, organizations may be classified according to the degree of
engineering jobs performed:

1. Level One - those with minimal engineering jobs like retailing firms.
2. Level Two - those with a moderate degree of engineering jobs like transportation companies.
3. Level Three - those with a high degree of engineering jobs like construction firms.

Management Skills Required at Various Levels

Among the types of organizations, the engineer will have a slim chance of becoming the
general manager or president of level one, unless of course, he owns the firm. The engineer manager
may be assigned to head a small engineering unit of the firm, but there will not be too many firms
which will have this unit.
In level two firms, the engineer may be assigned to head the engineering division. The need for
management skills will now be felt by the engineer manager.
Level three firms provide the biggest opportunity for an engineer to become the president or
general manager. In this case, the engineer manager cannot function
effectively without adequate management skills.

Topic 2: Engineering Management

Engineering management refers to the activity combining "technical knowledge with the ability
to organize and coordinate worker power, materials, machinery, and money."
When the engineer is assigned to supervise the work of even a few people, he is already
engaged in the first phase of engineering management. His main responsibility is to lead his group into
producing a certain output consistent with the required specifications.
The top position an engineer manager may hope to occupy is the general managership or
presidency of any firm, large or small. As he scales the management ladder, he finds that the higher he
goes up, the less technical activities he performs, and the more management tasks he accepts. In this
case, it is but proper that the management functions taught in pure management courses be well
understood by the engineer manager.

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
3
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

Management Defined

Since the engineer manager is presumed to be technically competent in his specialization, one
may now proceed to describe more thoroughly the remaining portion of his job, which is management.
Management may be defined as the creative problem solving-process of planning, organizing,
leading, and controlling an organization's resources to achieve its mission and objectives."

The Process of Management

Management is a process consisting of planning, organizing, directing (or leading), and


controlling.
Explained in a simple manner, management must seek to find out the objectives of the
organization, think of ways on how to achieve them, decide on the ways to be adapted and the material
resources to be used, determine the human requirements of the total job, assign specific tasks to
specific persons, motivate them, and provide means to make sure that the activities are in the right
direction.

Requirements for The Engineer Manager's Job

Depending on the type of products or services a firm produces, the engineer manager must have
the following
qualifications:

1. a bachelor's degree in engineering from a reputable school; In some cases, a master's degree
in engineering or business management is
required;
2. a few year’s experience in a pure engineering job;
3. training in supervision;
4. special training in engineering management.

These qualifications will be of great help to the engineer manager in the performance of the various
management functions.

How One May Become A Successful Engineer Manager

Successful engineer managers do not happen as a matter of chance, although luck is a


contributory factor. It is very important for the engineer manager to know the various factors leading to
successful management.
Kreitner indicates at least three general preconditions for achieving lasting success as a
manager. They are as follows:

1. ability
2. motivation to manage, and
3. opportunity

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
4
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

Ability

Managerial ability refers to the capacity of an engineer manager to achieve organizational


objectives effectively and efficiently.
Effectiveness, according to Higgins, refers to a description of "whether objectives are
accomplished", while efficiency is a description of the relative amount of resources used in obtaining
effectiveness."

To illustrate:
If a civil engineer was asked by his superiors to finish a 100-kilometer road cementing project
within eight months, he is said to be effective if he finished the job within the required period. On the
other hand, his efficiency is measured by the inputs (labor and materials) he poured into the project in
relation to the actual output (the 100 kilometer road). If the same output is made with less inputs, the
more efficient the civil engineer becomes.

Motivation to Manage

Many people have the desire to work and finish specific tasks assigned by superiors, but not
many are motivated to manage other people so that they may contribute to the realization of the
organization's objectives.
A management researcher, John B. Miner, developed psychometric instrument to measure
objectively an individual's motivation to manage. The test is anchored
to the following dimensions:

1. Favorable attitude toward those in positions of authority, such as superiors.


2. Desire to engage in games or sports competition with peers.
3. Desire to engage in occupational or work-related competition with peers.
4. Desire to assert oneself and take charge.
5. Desire to exercise power and authority over others.
6. Desire to behave in a distinctive way, which includes standing out from the crowd.
7. Sense of responsibility in carrying out the routine duties associated with managerial work.
High scores in the foregoing dimensions are associated with high motivation to manage.

Opportunity

Successful managers become possible only if those having the ability and motivation are given
the opportunity to manage. The opportunity for successful management has two requirements:

1. Obtaining a suitable managerial job, and


2. Finding a supportive climate once on the job.

Newspaper advertisements abound with needs for engineer managers. It is a little difficult to determine
if the firms requiring their services provide a supportive climate for effective and efficient management.
A supportive climate is characterized by the recognition of managerial talent through financial and
nonfinancial rewards.

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
5
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

Topic 3: Decision-Making as a Management Responsibility

Decisions must be made at various levels in the workplace. They are also made at the various
stages in the management process. If certain resources must be used, someone must make a decision
authorizing certain person to appropriate such resources.
Decision-making is a responsibility of the engineer manager. It is understandable for managers
to make wrong decisions at times. The wise manager will correct them as soon as they are identified.
The bigger issue is the manager who cannot or do not want to make decisions. Delaney concludes that
this type of managers are dangerous and "should be removed from their position as soon as possible."
Management must strive to choose a decision option as correctly as possible. Since they have
that power, they are responsible for whatever outcome their decisions bring. The higher the
management level is, the bigger and the more complicated decision-making becomes.

An example may be provided as follows:

The production manager of a certain company has received a written request from a section
head regarding the purchase of an air-conditioning unit. Almost simultaneously, another request from
another section was forwarded to him requiring the purchase of a forklift. The production manager was
informed by his superior that he can only buy one of the two requested items due to budgetary
constraints.
The production manager must now make a decision. His choice, however, must be based on
sound arguments for he will be held responsible, later on, if he had made the wrong choice.

What is Decision-Making?

Decision-making may be defined as the process of identifying and choosing alternative courses
of action in a manner appropriate to the demands of the situation."
The definition indicates that the engineer manager must adapt a certain procedure designed to
determine the best option available to solve certain problems.
Decisions are made at various management levels (i.e., top, middle, and lower levels) and at
various management functions (i.e., planning, organizing, directing, and controlling).
Decision-making, according to Nickels and others, “is the heart of all the management
functions."

The Decision-Making Process

Rational decision-making, according to David H. Holt," is a process involving the following steps:

1. diagnose. Problem
2. analyze environment
3. articulate problem or opportunity
4. develop viable alternatives
5. evaluate alternatives
6. make a choice
7. implement decision
8. evaluate and adapt decision results

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
6
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

Diagnose Problem

If a manager wants to make an intelligent decision, his first move must be to identify the
problem. If the manager fails in this aspect, it is almost impossible to succeed in the subsequent steps.
An expert once said "identification of the problem is tantamount to having
the problem half-solved."
What is a Problem? A problem exists when there is a difference between an actual situation
and a desired situation. For instance, the management of a construction company entered into a contract
with another party for the construction of a 25-storey building on a certain site. The actual situation of
the firm is that it has not yet constructed the building. The desired situation is the finished
25-storey building. In this case, the actual situation is different from the desired situation. The company,
therefore, has a problem and that is, the construction of the 25-storey building.

Analyze the Environment

The environment where the organization is situated plays a very significant role in the success
or failure of such an organization. It is, therefore, very important that an analysis of the environment be
undertaken.

The objective of environmental analysis is the identification of constraints, which may be


spelled out as either internal or external limitations. Example of internal limitations are as follows:
1. Limited funds available for the purchase of equipment.
2. Limited training on the part of employees.
3. III-designed facilities.

Examples of external limitations are as follows:

1. Patents are controlled by other organizations.


2. A very limited market for the company's products and services exists.
3. Strict enforcement of local zoning regulations.

When decisions are to be made, the internal and external limitations must be considered. It may be
costly, later on, to alter a decision because of a constraint that has not been previously identified.

An illustration of failure to analyze the environment is as follows:

The president of a new chemical manufacturing company made a decision to locate his factory
in a place adjacent to a thickly populated area. Construction of the building was made with precision
and was finished in a short period. When the clearance for the commencement of operation was sought
from local authorities, this could not be given. It turned out that the residents opposed the operation of
the firm and made sure that no clearance is given.
The president decided to relocate the factory but not after much time and money has been lost.
This is a clear example of the cost associated with management disregarding the environment when
decisions are made. In this case, the president did not consider what the residents could do.

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
7
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

Components of the Environment. The environment consists of two major concerns:

1. internal and
2. external.

The internal environment refers to organizational activities within a firm that surrounds decision-
making. Shown in Figure 2.1 are the important aspects of the
internal environment.

The external environment refers to variables that are outside the organization and not typically
within the short-run control of top management. Figure 2.2 shows the forces comprising the external
environment of the firm.

Develop Viable Alternatives

Oftentimes, problems may be solved by any of the solutions offered. The best among the alternative
solutions must be considered by management. This is made possible by using a procedure with the
following steps:

1. Prepare a list of alternative solutions.


2. Determine the viability of each solutions.
3. Revise the list by striking out those which are not viable.

To illustrate:

An engineering firm has a problem of increasing its output by 30%. This is the result of a new
agreement between the firm and one of its clients.

Figure 2.1 The Engineering Firm and


the Internal Environment in Decision-
Making

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
8
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

Figure 2.2 The Engineering Firm


and its External Environment

The list of solutions prepared by the engineering manager shows the following alternative courses of
action:

1. improve the capacity of the firm by hiring more workers and building additional facilities;
2. secure the services of subcontractors;
3. buy the needed additional output from another firm;
4. stop serving some of the company's customers; and
5. delay servicing some clients.

The list was revised and only the first three were deemed to be viable. The last two were deleted
because of adverse effects in the long-run profitability of the firm.

Evaluate Alternatives

After determining the viability of the alternatives and a revised list has been made, an
evaluation of the remaining alternatives is necessary. This is important because the next step involves
making a choice. Proper evaluation makes choosing the right solution less difficult.

How the alternatives will be evaluated will depend on the nature of the problem, the objectives
of the firm, and the nature of alternatives presented. Souder suggests that "each alternative must be
analyzed and evaluated in terms of its value, cost, and risk characteristics."

The value of the alternatives refers to benefits that can be expected. An example may be
described as follows: a net profit of P10 million per year if the alternative is
chosen.
The cost of the alternative refers to out-of-pocket costs (like P100 million for construction of facilities),

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
9
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

opportunity costs (like the opportunity to earn interest of P2 million per year if money is invested
elsewhere), and follow-on costs (like P3 million per year for maintenance of facilities constructed).

The risk characteristics refer to the likelihood of achieving the goals of the alternatives. If the
probability of a net profit of P10 million is only 10 percent, then the decision-maker may opt to
consider an alternative with a P5 million profit but with an 80 percent probability of success.

Another example of an evaluation of alternatives is shown below:

An engineer manager is faced with a problem of choosing between three applicants to fill up a lone
vacancy for a junior engineer. He will have to set up certain criteria for evaluating the applicants. If the
evaluation is not done by a professional human resources officer, then the engineer manager will be
forced to use a predetermined criterion.

A typical evaluation of job applicants will appear as follows:

Make a Choice

After the alternatives have been evaluated, the decision-maker must now be ready to make a
choice. This is the point where he must be convinced that all the previous steps were correctly
undertaken.
Choice-making refers to the process of selecting among alternatives representing potential
solutions to a problem. At this point, Webber advises that"...particular effort should be made to identify
all significant consequences of each choice."
To make the selection process easier, the alternatives can be ranked from best to worst on the
basis of some factors like benefit, cost, or risk.

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
10
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

Implement Decision

After a decision has been made, implementation follows. This is necessary, or decision-making
will be an exercise in futility.
Implementation refers to carrying out the decision so that the objectives sought will be
achieved. To make implementation effective, a plan must be devised.
At this stage, the resources must be made available so that the decision may be properly
implemented. Those who will be involved in implementation, accord-
ing to Aldag and Stearns, must understand and accept
the solution."

Evaluate and Adapt Decision Results

In implementing the decision, the results expected may or may not happen. It is, therefore,
important for the manager to use control and feedback mechanisms to ensure results and to provide
information for future decisions.
Feedback refers to the process which requires checking at each stage of the process to assure
that the alternatives generated, the criteria used in evaluation, and the solution selected for
implementation are in keeping with the goals and objectives originally specified.
Control refers to actions made to ensure that activities performed match the desired activities or
goals, that have been set.
In this last stage of the decision-making process, the engineer manager will find out whether or
not the desired result is achieved. If the desired result is achieved, one may assume that the decision
made was good. If it was not achieved, Ferrell and Hirt suggest that further analysis is necessary.13
Figure 2.3 presents an elaboration of this
last step.

Topic 4: Approaches in Solving Problems

In decision-making, the engineer manager is faced with problems which may either be simple or
complex. To provide him with some guide, he must be familiar with the following approaches:

1. qualitative evaluation, and


2. quantitative evaluation.

Qualitative Evaluation. This term refers to evaluation of alternatives using intuition and subjective
judgment. Stevenson states that managers tend to use the qualitative
approach when:

1. The problem is fairly simple.


2. The problem is familiar.
3. The costs involved are not great. I low cost
4. Immediate decisions are needed.

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
11
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

An example of an evaluation using the qualitative


approach is as follows:

A factory operates on three shifts with the following


schedule:

First shift - 6:00 A.M. to 2:00 P.M.


Second shift - 2:00 PM to 10:00 P.M.
Third shift - 10:00 PM to 6:00 A.M.

Each shift consists of 200 workers manning 200


machines. On September 16, 1996, the operations went
smoothly until the factory manager, an industrial
engineer, was notified at 1:00 P.M. that five of the
workers assigned to the second shift could not report for
work because of injuries sustained in a traffic accident
while they were on their way to the factory.
Because of time constraints, the manager made
an instant decision on who among the first shift workers
would work overtime to man the five machines.

Quantitative Evaluation. This term refers to the


evaluation of alternatives using any technique in a group
classified as rational and analytical.

Quantitative Models for Decision Making

The types of quantitative techniques which may


be useful in decision-making are as follows:

1. inventory models
2. queuing theory
3. network models
4. forecasting
5. regression analysis
6. simulation
7. linear programming
8. sampling theory
9. statistical decision theory

Inventory Models

Inventory models consist of several types all designed to help the engineer manager make decisions
regarding inventory. They are as follows:
1. Economic order quantity model - this one is used to calculate the number of items that
should be ordered at one time to minimize the total yearly cost of placing orders and carrying
the items in inventory.

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
12
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

2. Production order quantity model - this is an economic order quantity technique applied to
production orders.
3. Back order inventory model - this is an inventory model used for planned shortages.
4. Quantity discount model - an inventory model used to minimize the total cost when quantity
discounts are offered by suppliers.

Queuing Theory

The queuing theory is one that describes how to determine the number of service units that will
minimize both customers waiting time and cost of service.
The queuing theory is applicable to companies where waiting lines are a common situation.
Examples are cars waiting for service at a car service center, ships and barges waiting at the harbor for
loading and unloading by dock workers, programs to be run in a computer system that processes jobs,
etc.

Network Models

These are models where large complex tasks are broken into smaller segments that can be managed
independently.

The two most prominent network models are:

1. The Program Evaluation Review Technique (PERT) - a technique which enables engineer
managers to schedule, monitor, and control large and complex projects by employing three time
estimates for each activity
2. The Critical Path Method (CPM) - this is a net- work technique using only one time factor
per activity that enables engineer managers to schedule, monitor, and control large and complex
projects.

Forecasting

There are instances when engineer managers make decisions that will have implications in the
future. A manufacturing firm, for example, must put up a capacity which is sufficient to produce the
demand requirements of customers within the next 12 months. As such, man. power and facilities must
be procured before the start of operations. To make decisions on capacity more effective, the engineer
manager must be provided with data on demand requirements for the next 12 months. This type of
information may be derived through forecasting.
Forecasting may be defined as "the collection of past and current information to make
predictions about the future."

Regression Analysis

The regression model is a forecasting method that examines the association between two or
more variables. It uses data from previous periods to predict future events."
Regression analysis may be simple or multiple depending on the number of independent
variables present. When one independent variable is involved, it is called simple regression; when two
or more independent variables are involved, it is called multiple regression.

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
13
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

Simulation

Simulation is a model constructed to represent reality, on which conclusions about real-life


problems can be used. It is a highly sophisticated tool by means of which the decision maker develops a
mathematical model of the system under consideration.
Simulation does not guarantee an optimum solution, but it can evaluate the alternatives fed into
the process by the decision-maker.

Linear Programming

Linear programming is a quantitative technique that is used to produce an optimum solution


within the bounds imposed by constraints upon the decision. Linear programming is very useful as a
decision-making tool when supply and demand limitations at plants, warehouse, or market areas are
constraints upon the system.

Sampling Theory

Sampling theory is a quantitative technique where samples of populations are statistically


determined to be used for a number of processes, such as quality control and marketing research.

When data gathering is expensive, sampling provides an alternative. Sampling, in effect, saves
time and money.

Statistical Decision-Theory

Decision theory refers to the rational way to conceptualize, analyze, and solve problems in
situations involving limited, or partial information about the decision environment.
The purpose of Bayesian analysis is to revise and update the initial assessments of the event
probabilities generated by the alternative solutions. This is achieved by the use of additional
information.
When the decision-maker is able to assign probabilities to the various events, the use of
probabilistic decision rule, called the Bayes criterion, becomes possible. The Bayes criterion selects the
decision alternative having the maximum expected payoff, or the minimum expected loss if he is
working with a loss table.

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
14
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

Summary:

Engineers are known for their great contributions to the development of the world's civilization.
There are many areas where their presence is necessary like research, design and development, testing,
manufacturing, construction, sales, consulting, government,
teaching, and management.
Engineers may be found contributing their share in the various levels of organization.
Engineering activities need to be managed and engineers are sometimes placed in positions
where they have to learn management skills.
Management is concerned with planning, organizing, leading, and controlling an organization's
resources to achieve its mission and objectives.
There are certain qualifications required of the engineer manager.
One may become a successful engineer manager if the preconditions of ability, motivation to
manage, and opportunity to manage are met.
Decision-making is a very important function of the engineer manager. It is necessary for
engineer managers to develop some skills in decision-making.
Decision-making process consists of various steps, namely: diagnose problem, analyze
environment, articulate problem or opportunity.
Qualitative evaluation is used for solving fairly simple problems, while quantitative evaluation
complex ones.

Reference:

C. Merle Crawford, New Products Management, Third Edition (Homewood, Illinois: Richard D. Irwin,
Inc., 1991)
Jay Heizer and Barry Render, Production and Operations Management (Boston: Allyn and Bacon,
1993)
James M. Higgins, The Management Challenge (New York: MacMillan Publishing Co., 1991)

INSTRUCTION: Answer the following questions in your own words. Write your

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
15
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

answers in a short bond paper.

1. In what current concerns are engineering outputs needed?


2. In what areas are engineers currently involved?
3. What are the components of the environment from the point of view of the decision
maker? What do they consist of?
4. Can the engineer manager avoid making management decision? Why or why not?
5. When a problem becomes apparent and the engineer manager chooses to ignore it, is he
making a decision? Explain your answer.

1. Provide an illustration of how Bayesian analysis is used.


2. Prepare a list of ten engineers who became president or general manager of a large company.
3. Cite at least 3 situational example which you can apply the quantitative models for decision
making.

Example Situation (Linear Programming Model)

Let’s say a FedEx delivery man has 6


packages to deliver in a day. The warehouse is located
at point A. The 6 delivery destinations are given by U,
V, W, X, Y, and Z. The numbers on the lines indicate
the distance between the cities. To save on fuel and
time the delivery person wants to take the shortest
route.
So, the delivery person will calculate
different routes for going to all the 6 destinations and
then come up with the shortest route. In this situation
we will be using linear programming because it is
used for obtaining the most optimal solution for a
problem with given constraints. In linear programming,
we formulate our real-life problem into a
mathematical model. It involves an objective function, linear inequalities with subject to constraints.

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
16
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

LEARNING MODULE
PCEA 008 – ENGINEERING MANAGEMENT

MODULE 1: THE FIELD OF ENGINEERING


MANAGEMENT

Topic 1: Functions of the Engineer


Topic 2: Engineering Management
Topic 3: Decision-Making as a Management Responsibility
Topic 4: Approaches in Solving Problems

ENGR. ERIKA G. LLABRES


THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
17
UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE
SANTIAGO CITY, PHILIPPINES

LEARNING MODULE

PCEA 008 – ENGINEERING ECONOMICS

MODULE 2: MONEY TIME RELATIONSHIPS AND EQUIVALENCE

Topic 1: Terminologies
Topic 2: Interest and the Time Value

ENGR. ERIKA G. LLABRES

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
18

You might also like