Economic Aspects of the Appraisal and Selection of Engineering Projects

In theory and social practice the choice and appraisal of engineering projects is based on the economic models discussed in this article. The inevitable conclusion is that at the detailed design level the technical parameters prevail, but at system level the economic characteristics and considerations take priority. The recognition of the importance of economic theory and marginal analysis with regard to engineering practice is comparatively new and, because of this, relatively limited. The above dependency ensues from the transition of engineering from designing components and mechanisms to the design of systems. The complex economic appraisal of alternative projects is a critical stage in the process of analysis. This necessitates not only the use of quality indicators but also quantitative methods of risk assessment.