Cost Benefit Analysis and Design

In the USA, all first year engineering students are required to take Engineering Economy.

Today, you will also hear this referred to as Life-Cycle Cost Analysis.

Twenty years ago it was called "Value Engineering".

But basically, no major engineering decision is made without looking at the total cost of all viable engineering alternatives over the life-cycle to see how these costs compare.

Must include capital, maintenance, annual operating costs, everything. Bring all future costs into Present Worth Cost as the value of money changes over time.

This is done going back over 100 years in the "Engineering News Record" which is widely published and read.

There are always questions on this topic in the Fundamentals Exam (first of two eight hours tests required to obtain an engineering license in the US).

Thank you for your useful comments in this subject.

i just want to add that its not only cost that determines what is the best option to go for.

lets consider the example of redesigning a machine which creates additional risks for the employees in same time it can save us some of the operating cost

so how we can evaluate diifferent alternatives taking into consideration all the positives and negatives associated with each decision.

Only the viable alternatives are considered. An alternative that poses a safety risk is dismissed.