MIE258H1 Lecture 15: Lecture_15 Chapter 15
25 Jan 2019
School
Department
Course
Professor
Document Summary
Based off the textbook contemporary engineering economics: a canadian perspective . Objectives: sensitivity analysis, break-even analysis, net-present-worth probability distribution, monte carlo simulation, mean-variance analysis. Break even analysis and sensitivity: suppose i purchase or rent a honda crv, purchase price: ,000, salvage: (est. ) for a 2011 model ,000, maintenance average ,000/year, annual cost = ~,300/year, rental: about for a long weekend (budget) I don"t need an suv every time i rent! Could get a smaller (cheaper) car some weekends. Suppose average was : costs could go up for renting! Hmmm: there are many numbers that we could play sensitivity with: Interest rate: typically, we experiment with only one variable at a time, want to understand which factors are really significant. 0. 00 s d n a s u o h t n i. Value-at-risk: var: measures the probability that a portfolio (or a project) will lose more than some value.
