Jack R. Lohmann

Defining, developing and assessing global competence in engineers

Engineering curricula are increasingly focused on developing student competencies. Many new competencies needed by engineers today are professional skills (sometimes called the ‘soft skills’). Among the new competencies for engineering graduates is global competence, the ability to work knowledgeably and live comfortably in a transnational engineering environment and global society. While there is broad agreement within the engineering community for the need to better prepare engineers for global practice, there is much less agreement as to what skills and abilities define global competence, what combination and duration of international education and experiences best instil it and what means and metrics should be used to judge whether students have attained it. This paper presents a conceptual model to define global competence, a curriculum model for instilling it and an assessment model to determine if graduates have attained it. It concludes with a description of a quasi-experimental research effort now underway designed to evaluate and validate these models.

A Dynamic Replacement Economy Decision Model

Abstract A generalization of Wagners dynamic programming model for the replacement economy decision problem is presented. The model, illustrated by numerical examples, classifies relevant cash flows into three components: capital transfers, operating disbursements, and operating revenues. Conceptually, this model could be extended easily to an arbitrary number of component cash flows. Multiple alternative challengers to a current defender are considered, and each component cash flow of each challenger can vary independently according to the time of acquisition; thus differential inflation and prospective technological changes could be dealt with easily. A PASCAL implementation of the model, included as an appendix, was used to identify prospectively optimal sequences of assets in three numerical examples.

Equipment replacement under technological change

For infinite‐horizon replacement economy problems it is common practice to truncate the problem at some finite horizon. We develop bounds on the error due to such a truncation. These bounds differ from previous results in that they include both revenues and costs. Bounds are illustrated through a numerical example from a real case in vehicle replacement.

The IRR, NPV and the Fallacy of the Reinvestment Rate Assumptions

ABSTRACT The Internal Rate of Return and Net Present Value decision criteria are probably the most well known economic decision criteria: they are also probably the most misunderstood. The ‘reinvestment rate assumptions’ attributed by some writers are two such misconceptions and they appear to be the result of a misunderstanding of two fundamental principles of economic decision making: an economic decision should be (1) based on the prospective differences in the (2) real (out-of-pocket) monetary consequences. This paper illustrates the fallacy of the ‘reinvestment rate assumptions’ numerically, mathematically, and intuitively.

MULTIPLE OPTIONS IN PARALLEL REPLACEMENT ANALYSIS: BUY, LEASE OR REBUILD

An integer programming model solving the demand constrained finite horizon parallel replacement problem with homogeneous assets is presented here with asset purchases, leases and rebuilds as viable replacement options. The model minimizes the purchase, operating, maintenance and salvage costs of a fleet of assets while meeting demand requirements. The formulation is adapted to handle both capital and expense rationing constraints. Computational experience with real sized problems in the transportation industry is discussed and small examples are provided for illustration.

THE IRR,NPV AND PAYBACK PERIOD AND THEIR RELATIVE PERFORMANCE IN COMMON CAPITIAL BUDGETING DECISION PROCEDURES FOR DEALING WITH RISK

ABSTRACT The relative performance of six capital budgeting decision procedures for dealing with risk was studied using Monte Carlo computer simulation of long sequences of capital rationing decisions involving risk. Five of the decision procedures included either subjective or objective risk assessment and used common measures of worth: Net Present Value, Internal Rate of Return, and Payback Period. The sixth decision procedure was random selection. Also investigated were (1) the effects of errors in risk assessment and (2) the effectiveness of the decision strategy to prefer opportunities with short-term capital recovery periods to reduce the exposure to risk of the capital invested.

A Stochastic Replacement Economic Decision Model

Abstract This paper describes a general model to solve stochastic replacement economy problems. A general probabilistic model to describe the uncertainty about the cash flows of current and future challengers is presented. The model is then expressed as a stochastic replacement problem and solved using Monte Carlo simulation and dynamic programming. The model can consider both finite and infinite horizon times. A numerical example is provided.

SOLVING LARGE REPLACEMENT PROBLEMS WITH BUDGET CONSTRAINTS

Abstract Traditional replacement models assume unlimited capital. In practice, however, firms frequently use budgets to control their expenditures. Budget constraints necessitate that all replacement decisions be considered as a portfolio, creating a difficult combinatorial problem. In previous research, we developed a branch-and-bound algorithm for solving moderately-sized problems optimally. In this paper, we propose a dual heuristic for dealing with large, realistically sized problems. First, we solve the individual replacement problems ignoring the budget constraints. Then, we reduce, or eliminate, if possible, budget violations by solving a Lagrangian dual problem. The computational tests suggest that the effectiveness of the approach increases with problem size.

Designing, developing, and implementing outcomes-based assessment programs to respond to multiple external constituents

External governing organizations and accreditation bodies are increasingly requiring universities to demonstrate that they have appropriate self-regulating processes in place to achieve their stated missions and goals. Central to these processes is that they be based on outcomes assessment and be focused on continuous improvement. This paper presents an overview of Georgia Techs (USA) experiences in designing and developing outcomes-based assessment programs for all its undergraduate and graduate programs with an emphasis on those experiences within the College of Engineering. It also presents the current efforts to implement the programs within a continuous improvement process that is intended to be broadly responsive to the needs of multiple external constituents. It concludes with seven suggestions for those embarking on developing outcomes-based assessment programs.

A Decision Procedure for Capital Rationing Investment and Borrowing Decisions

This paper presents a decision procedure to aid in making capital rationing investment and borrowing decisions. Weingartners Basic Horizon Model and Oakford and huesens Maximum Prospective Value criterion are both extended to explicitly include long-term borrowing decisions. Information derived from interviews with financial executives on the subject of business attitudes toward borrowing is used to develop the conceptual logic of the decision procedure, which is presented in terms of a mathematical programming formulation.