Chemical Engineering Economics Semester 3 (SE Second Year) BE Chemical Engineering University of Mumbai Topics and Syllabus

CBCGS [2017 - current]
CBGS [2013 - 2016]
Old [2000 - 2012]


100 Introduction to Basic Principles of Economics
  • Economics-various definitions
  • Concept of Need – hierarchy
  • Market - Concept of Price determination under particular market conditions – perfect competition market & monopoly market, causes
  • Price Discrimination-concept, types
  • Concept of Cost-total cost, fixed and variable cost, direct and indirect cost
  • Cost index – definition, types
200 Demand and Supply Analysis
  • Law of demand-assumptions and exceptions
  • Demand schedule and demand curve
  • Determinants of demand
  • Changes and variations in demand
  • Demand elasticity-definition, types, methods of measurement of elasticity, Income elasticity of demand, types.
  • Law of Supply-assumptions and exceptions
  • Supply schedule and supply curve
  • Determinants of supply, changes and variations in supply
  • Supply elasticity-definition, types, determinants
  • Methods of measurement of supply
300 Economics of Production and Growth
  • Production function-types of production economies
  • Diseconomies of scale
  • Features of growth
  • Growth v/s Development
  • Determinants of growth (economic and non-economic)
  • Stages of growth
  • Growth strategy- steady state and big – push growth strategy; balanced and unbalanced growth
400 Cost Accounting
  • Outline of Accounting Procedure
  • Basic Relationship in Accounting
  • Balance Sheet- types of Asset; Current and Cash Ratio
  • Income Statement; Debits and Credits; General format of Journal and Ledger
  • Methods of cost accounting
  • Accumulation, inventory and cost-of-sales account
  • Material cost – Different Methods: current average, fifo, lifo
500 Interests and Investment Costs
  • Importance of time value of money- Interest and Interest rate
  • Types of Interest – Simple interest (ordinary and exact), Compound interest, Nominal and Effective interest rates, Continuous interest
  • Present worth and Discount
  • Annuities, Perpetuities and Capitalized costs
  • Cash Flow in Chemical Projects
600 Taxes and Insurance
  • Concept of taxes and insurance
  • Types of Taxes - property tax, excise tax, income tax Capital gain tax, surtax, normal tax
  • Insurance types, Legal responsibilities, Self insurance
  • Effect of taxes and depreciation on annual income
700 Cost Estimation
  • Cash flow to Industrial operation – Tree diagram; Cumulative Cash position
  • Factors affecting cost estimation
  • Total, fixed, working capital investment
  • Breakdown of Fixed capital investment- Direct costs; Indirect costs
  • Types of Capital Cost Estimates
  • Grass Root plant; Battery limit
  • Estimation of equipment cost by scaling (six tenth rule); Components of costs in FCI
  • Methods of Cost Estimation
  • Estimation of Total Product Cost
  • Break even Analysis
800 Profitability, Alternative Investments and Replacements
  • Introduction; Profitability Standards
  • Mathematical methods for profitability evaluation- Rate of Return on investment method , Discounted cash flow method , Net present worth method, Capitalized Cost method , Pay out period method; Advantages & Disadvantages of Different Profitability Analysis Methods and their comparison
  • Alternative investments
  • Replacement analysis
  • Practical factors affecting investment and replacement decisions

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