Engineering Costs.

Evaluating a set of feasible alternatives requires that many costs be analyzed. Examples include costs for initial investment, new construction, facility modification, general labor, parts and materials, inspection and quality, contractor and subcontractor labor, training, computer hardware and software,material handling, fixturesand tooling, datamanagement, and technical support, aswell as general support costs (overhead). In this sectionwedescribe several concepts for classifying and understanding these costs.

⇒Fixed, Variable, Marginal, and Average Costs: Examples.

⇒Sunk Costs.

⇒Opportunity Costs.

⇒Recurring and Nonrecurring Costs.

⇒Cash Costs Versus Book Costs.

⇒Life-Cycle Costs.