Question

What are some of the basic causes of uncertainty in engineering economy studies?

Answer 1

UNCERTAINTY : uncertainty, doubt, dubiety, skepticism, suspicion, mistrust mean lack of sureness about someone or something. uncertainty may range from a falling short of certainty to an almost complete lack of conviction or knowledge especially about an outcome or result A decision under uncertainity is a decision problem characterized by several unknow outcomes for which probabilities of occurence cannot be estimated.

Some of the basic causes of uncertainty in engineering economy studies are : -

• Possible inaccuracy of the cash flows estimates used in engineering studies.
• The type of business involved in relation to the future health of the economy.
• Type of physical plant and equipment involved.
• The length of the study period used in the analysis.

The answer is shot and to the point.

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