Economics for Engineers and Production Managers

Economics for Engineers and Production Managers


Seminar description:

The company’s executives and engineers, when attempting to improve the company’s performance, need to know and understand economic concepts such as balance sheet, loss account and cash flow. Decision making without the necessary understanding of the financial consequences of that decision can lead to business failure.

Seminar purpose

The purpose of this seminar is the provision of basic financial knowledge that will enable learners to:

  • Perceive better the economic function of the company in the modern environment
  • Get familiarized with economic concepts and definitions that need to know on their daily business environment
  • Make decisions in which they take into account the possible financial consequences in the company

Addresses to

  • Engineers staffing the various units other than the company’s financial services
  • Engineering Managers – Supervisors and Managers of all departments
  • Executives and Managers in Production, Logistics, Supply Chain

Expected results

The trained executives at the end of the seminar will have gained sufficient understanding of the financial function of the company and will know the basic economic terms that are essential to know in order to achieve effective function in their workplace.

Contents of the seminar

  • The context
  • Strategic organizing
  • Annual budget. Capital investment budget
  • Analysis of deviations
  • Total cost of ownership – cost over the asset’s life
  • “To build or buy?” Decisions
  • In-house versus outsource decisions, maintenance or replacement, purchase or rental
  • Depreciation, Break-even point
  • Management Accounting with emphasis in Throughput Accounting
  • Design of a company’s Key Performance Indicators (KPIs)
  • Modeling cost and price
  • Presentation of financial affairs for internal use and information
  • Resource allocation and exploitation, Efficiency-Effectiveness
  • Cost analysis – cost, profitability and revenue centers
  • Historical and sunk cost and why it should not be taken into account in decision making
  • The concept of quality cost
  • The cost savings resulting from reduced inventories, cycle time production as well as from the reprocessed and improved production efficiency
  • Explanation of quality characteristics in decision making
  • The concept of just-in-time in production and maintenance systems
  • Cash flow, DCF, NPV, IRR
  • Sustainability, internal and external cost