Chapter 2, Project Selection
Casehardened veterans of my engineering economics courses will be shocked to learn that there are models for project selection other than selection based on time-value-of-money calculations. But remember two things. Engineering economics always starts with a description of "intangibles" and notes that things other than money are sometimes quite important, becoming more important as the dollar values of the alternatives become closer. This chapter trivialized engineering economics to only one of the numerical models that are available when choosing among alternative projects. Of course you can't use economic analysis, until you have some idea of the dollars involved. At the earliest stages of a project, those dollar estimates many not be available. Also, often there are many constraints that must be satisfied before dollars are relevant. Finally, this book points out many of the human-nature issues in project selection. It is especially important to recognize when you are at a transition between crunching numbers and dealing with human people. Engineers CAN do both, but you need to be aware of the difference.
This edition of Meredith has a section on Project Bids and RFPs. The section is a pretty brief introduction to an activity on which I spent half my life (or it seems that way), writing proposals and generating bids. Also, we offer a one-credit course in proposals. Nothing wrong with what the book has, but it misses the key point - proposals themselves are often a project. And that project - to get a project - goes through all the stages of a full project - starting with getting sufficient time and budget to do the proposal. Also, regarding the "project portfolio" from this chapter, note that if you are proposing on multiple projects, you may get some of them or none of them. So your planning for the resources you need to do the projects that you get is always uncertain.