Principles of Cost and Finance for Engineers
I.D. # C0828 Duration 3 Days
In today's corporate environment of shrinking budgets, required structural cost reductions, sharing of global designs/services, and pricing pressures, it is critical that engineers possess a working knowledge of engineering economics principles. To fully understand the economic viability of engineering decisions, engineers need to find the appropriate balance between design alternatives, resulting costs, and impact on their enterprise. This seminar introduces participants to the cost, finance and economic concepts and their applications to products and services. This three-day course provides you with practical information normally obtained through university level economics and business management courses and will help you to maximize efficiencies from both an engineering and business perspective.

Note: Attendees are requested to bring with them a business or scientific calculator capable of doing exponential calculations.

Learning Objectives
By attending this seminar, you will be able to:

  • Understand the hierarchy of economics, finance and cost in making financial decisions
  • Review financial statements and ratios in assessing the financial state of a business
  • Select the best decision-making criteria in making project decisions and allocating capital
  • Implement a benchmarking plan to establish a competitive market position
  • Determine the enterprise costs of raising capital through debt and equity offerings
  • Analyze make-buy and buy-lease options and other alternative decisions based on the best financial strategies
  • Understand the financial sensitivity of project decisions and the use of decision tools for integrating business requirements
  • Determine and optimize all costs in the production process
  • Select the optimum cost accounting strategy and inventory plan
  • Identify the appropriate cost estimation methodology for metallic, electronic & plastic components
  • Select cost control alternatives from marketing, engineering, commercial & geographic options

Who Should Attend
This seminar will benefit engineers having responsibilities in manufacturing, maintenance, research, design, product and process development, program and project management, troubleshooting, and materials management. Additionally, individuals in non-engineering disciplines, including marketing and general management, will benefit from an introduction to the engineering perspective.
Individuals holding an engineering degree in any discipline, combined with experience in the transportation or similar industry will benefit the most from this course.
Seminar Content
DAY ONE - Principles of Economics & Finance

  • Process & Responsibility for Determining Cost
  • Economics, Finance & Cost Principles

    • Macroeconomics and Growth
    • Microeconomics, Supply & Demand
    • International Economics & Comparative Advantage
    • Finance & Accounting: Corporate

  • Finance

    • Financial Statements & GAAP
    • Financial Analysis & Ratios, Case Analysis
    • Capital Sources & Allocation

  • Time Value of Money and Decision Making

    • Interest: simple and compounded
    • Inflation
    • Worth: present and future values

  • Decision Making

    • Net Present Value, Payback Period
    • AAR, Internal Rate of Return, Profitability Index
    • Case Analysis

  • Benchmarking Module

DAY TWO - Cost Impact & Enterprise Decisions

  • Cost Impact on the Enterprise

    • Cost of capital, cost of equity and debt, WACC, Case Analysis
    • Cost of Ownership, Depreciation; Accelerated cost recovery; Depletion
    • The influence on tax obligations

  • Alternative Financial Decisions Using Case Analysis

    • Make-Buy
    • Buy-Lease
    • Repair-Replace
    • Investments of Unequal Life

  • Sensitivity & Scenario Analysis
  • Matrix Priority Rating Systems

DAY THREE - Cost Management

  • Production Cost Relationships

    • Break-even Point
    • Marginal Costing

  • Elements of the Production Process

    • Pricing influences -- Quality; Competition
    • Elasticity of Demand

  • Cost Principles & Definition

    • Accounting, Opportunity, Estimating
    • Fixed, Variable, Cost Function, Transfer Pricing
    • Economies of Scale

  • Managerial & Cost Accounting

    • Cost Volume Profit Analyses
    • Standard Costing
    • Throughput Costing & Case Analysis
    • Activity-based

  • Inventory Management

    • Types
    • Accounting

  • Cost Estimating Methodology

    • Activity-based costing
    • Cost analysis process examples (metallic, electronic, plastic)

  • Cost Control Alternatives

    • Marketing & content evaluation
    • Engineering & redesign (DFSS, DFMA, VE, Benchmarking)
    • Commercial Decisions (Purchasing, Economies of Scale)
    • Regions of manufacture & transportation

Instructor(s): James Masiak

James Masiak

 Instructor James Masiak 
Since 1986, James Masiak has been acquiring experience in product and process development and implementation of business processes for General Motors. Activities include the implementation of an enhanced engineering product cost management process within GM North America, the alignment of cross-functional organizational initiatives, and development of an engineering resource allocation plan for GM Regions. Mr. Masiak was also responsible for the development and implementation of Global Engineering and Business Strategies across General Motors International Operations. His initial assignments at GM included vehicle and component testing & analyses, product development & management and strategic planning and benchmarking. He has recently applied the Innovation Corps Business Model Canvas methodology in assisting college and private sector startups.

Mr. Masiak received his B.S. in Mechanical Engineering from Wayne State University, his M.S. in Mechanical Engineering from the Massachusetts Institute of Technology, and his M.B.A. from the Michigan State University Executive Management Program.

"The instructor's in-depth knowledge pertaining to financial topics and course material combined with [his] industry experience created a very informative and engaging class."
Kevin Olesky
Senior Engineer
Mercedes-Benz USA



Fees: $1699 SAE Members: $1529