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Economics and Decision Analysis for Engineers (PET685)

This course teaches the skills required for a key component of an Engineer's job - creating value by making decisions that yield optimal returns on the allocation of human and financial resources.


Course description for study year 2022-2023. Please note that changes may occur.

Facts
Course code

PET685

Version

1

Credits (ECTS)

10

Semester tution start

Autumn

Number of semesters

1

Exam semester

Autumn

Language of instruction

English

Content

Engineers perform technical work to support the business objectives of the organization they work for (corporation, government). It is therefore important that they understand that business because it will influence the judgments they make.

Economic evaluations provide the main source of the organization's information by which investment and operational decisions are made regarding the most effective use of resources. There are many subtleties and assumptions that underlie the apparently straight-forward economic calculations that are often seen. Consequently, a fundamental understanding of the concepts behind economic evaluation and of techniques for performing them within a petroleum context, are essential skills.

The many uncertainties inherent to the offshore business create considerable uncertainty in the value that can be realized from resource-allocation decisions. Consequently, there will be a strong emphasis on evaluating the impacts of uncertainty, managing its resultant risks and planning to exploit its up-side potential. 

Learning outcome
The course provides understanding and knowledge of economic and business concepts, time-value of money, discounted cash flow, cash-flows, net present value and other economic decision criteria, the decision-making process, multi-objective decision making, decision-tree analysis, and value-of-information & flexibility. Some of the psychological and judgmental aspects of how people respond to uncertain and complex decision situations will be discussed. 
Required prerequisite knowledge
None
Recommended prerequisites
Bachelor degree in engineering.
Exam
Form of assessment Weight Duration Marks Aid
Digital school exam 1/1 4 Hours Letter grades All

The assessment consist of a digital on-campus exam. 

Coursework requirements

Portfolio containing five assignments that needs to be approved in to acccess the final exam. 

The studetns may cooperate on the assignments. 

Course teacher(s)
Course coordinator: Reidar Brumer Bratvold
Course coordinator: Aojie Hong
Head of Department: Alejandro Escalona Varela
Method of work
Lectures, Interactive discussions, compulsory assignments, self-study or group work. Lecture language is English. Excel and Python will be used for assignments and tests. The course does provide a short introduction to Python but it is NOT a course in Python so the students will need to consult other resources for learning Python if they are not already familiar with it.
Open for
Admission to Single Courses at the Faculty of Science and Technology Exchange programme at Faculty of Science and Technology
Course assessment
Form and/or discussion.
Literature
The syllabus can be found in Leganto