Y L F M A E T Team-Fly® Engineering and Technology Management Tools and Applications ForalistingofrecenttitlesintheArtechHouseTechnologyManagementand ProfessionalDevelopmentLibrary,turntothebackofthisbook. Engineering and Technology Management Tools and Applications B. S. Dhillon Artech House Boston • London www.artechhouse.com LibraryofCongressCataloging-in-PublicationData Dhillon,B.S. Engineeringandtechnologymanagementtoolsandapplications/B.S.Dhillon. p. cm.—(ArtechHousetechnologymanagementandprofessional developmentlibrary) Includesbibliographicalreferencesandindex. ISBN1-58053-265-9(alk.paper) 1.Engineering—Management. 2.Technology—Management. I.Title. II.Series. TA190.D47 2002 620’.0068—dc21 2002074491 BritishLibraryCataloguinginPublicationData Dhillon,B.S. Engineeringandtechnologymanagementtoolsandapplications. (ArtechHousetechnologymanagementandprofessionaldevelopmentlibrary) 1.Engineering—Management 2.Technology—Management I.Title 620’.0068 ISBN1-58053-265-9 CoverdesignbyIgorValdman ©2002ARTECHHOUSE,INC. 685CantonStreet Norwood,MA02062 Allrightsreserved.PrintedandboundintheUnitedStatesofAmerica.Nopartofthisbook may be reproduced or utilized in any form or by any means, electronic or mechanical, in- cludingphotocopying,recording,orbyanyinformationstorageandretrievalsystem,with- outpermissioninwritingfromthepublisher. Alltermsmentionedinthisbookthatareknowntobetrademarksorservicemarkshave been appropriately capitalized. Artech House cannot attest to the accuracy of this informa- tion.Useofaterminthisbookshouldnotberegardedasaffectingthevalidityofanytrade- markorservicemark. InternationalStandardBookNumber:1-58053-265-9 LibraryofCongressCatalogCardNumber:2002074491 10987654321 Affectionatelydedicatedtomydaughter,Jasmine . Contents Preface xxi 1 Introduction 1 1.1 HistoryofManagement 2 1.2 TermsandDefinitions 3 1.3 ManagementCharacteristicsandFunctionsand TraditionalManagementVersusModernManagement 5 1.4 EngineeringandTechnologyManagement ChallengesandSkillRequirements 6 1.5 UsefulInformationonEngineering andTechnologyManagement 10 1.5.1 Books 10 1.5.2 ProfessionalOrganizations 11 1.5.3 Journals 11 1.6 ScopeoftheText 12 1.7 Problems 12 References 13 vii viii EngineeringandTechnologyManagementToolsandApplications 2 OrganizingandtheHumanElement 15 2.1 Introduction 15 2.2 TheComponentsofOrganizingandGuidelines forPlanninganOrganization 16 2.3 OrganizationalChartsandBasicRelationshipsin OrganizationalStructures 17 2.4 CentralizationandDecentralizationofOrganizations, SpanofControl,andDelegation 19 2.5 MethodsofOrganization 23 2.5.1 OrganizationbyProduct 24 2.5.2 OrganizationbyFunction 24 2.5.3 OrganizationbyProject 25 2.5.4 OrganizationbyTerritory 26 2.5.5 MatrixOrganization 27 2.6 FunctionsofanEngineeringDepartmentand GuidelinesforOrganizingaNewEngineering Department 27 2.7 CharacteristicsandNeedsofanEngineer,Routesfor anEngineertoObtainManagementPositions,and TransitionofanEngineertoaManagerialPosition 30 2.8 AnEngineeringManager’sQualitiesandActivities 33 2.9 MotivatingOthersandAnalyzingTeamCharacteristics 34 2.10 CommitteesandStaffMeetings 35 2.11 DisplacingManagersandanOrganization Size-EfficiencyModel 38 2.11.1 AnOrganizationSize-EfficiencyModel 40 2.12 Problems 42 References 43 3 ToolsforMakingEffectiveEngineeringand TechnologyManagementDecisions 45 3.1 Introduction 45 Contents ix 3.2 DiscountedCashFlowAnalysis 46 3.2.1 CompoundInterestandPresentValue 46 3.2.2 UniformPeriodicPaymentAmountandPresentValue 48 3.3 DepreciationAnalysis 49 3.3.1 MethodI 50 3.3.2 MethodII 51 3.3.3 MethodIII 52 3.4 DecisionTrees 53 3.5 OptimizationTechniques 56 3.5.1 LagrangianMultiplierMethod 56 3.5.2 LinearProgrammingMethod 58 3.6 LearningCurveAnalysis 61 3.7 FaultTreeAnalysis 63 3.8 Forecasting 67 3.8.1 ForecastingTypesandTimeHorizons 68 3.8.2 ForecastingSteps,Methods,andTechnique SelectionFactors 69 3.8.3 SimpleAverage 70 3.8.4 ExponentialSmoothing 71 3.9 Problems 73 References 74 4 ProjectSelectionandManagement 77 4.1 Introduction 77 4.2 TermsandDefinitions 78 4.3 TypesofInformationRequiredfor EvaluatingaProject 79 4.4 ProjectSelectionModels 82 4.4.1 Benefit-CostRatioModel 82 4.4.2 DismanModel 83 4.4.3 PacificoModel 85