Integrating Activity and Competency based Instruction
into an Introductory Mechanical Engineering Technology Design Class

by

James J. Houdeshell
jhoudesh@sinclair.edu
Quality Engineering Technology Department
Sinclair Community College

Abstract: This paper describes the success of a modular, activity-based course, based on a new learning architecture, designed to teach students the product realization process and problem solving and analysis skills.

The curricular backbones of this course are the "Engineering Design and Problem Solving" Toolkit from Benjamin/Cummings, three activity-based instructional modules, "Units and Conversions", "Customer Satisfaction", and "Conceptual Design" which includes a fully developed case problem based on a virtual company "Robotic Grippers, Inc.". The National Center of Excellence for Advanced Manufacturing Education (NCE/AME), a NSF sponsored Advanced Technological Education (ATE) Center developed the three instructional modules and the case problem.

I. Background

Sinclair Community College, through the Advanced Integrated Manufacturing (AIM) Center, a partnership between Sinclair and University of Dayton, received a multi million dollar grant from the National Science Foundation ATE Program for the creation of a National Center of Excellence for Advanced Manufacturing Education (NCE/AME). [1.] The center, headquartered on the Sinclair campus in Dayton, Ohio started January 1, 1995, is accomplishing the following objectives:

• To develop a new competency based, occupationally verified, seamless curriculum beginning in grade 11 through the Associate of Applied Science degree, culminating with a baccalaureate degree, using advanced manufacturing as the focus.
• To write, pilot test and publish curriculum materials to improve mathematics, science and manufacturing engineering technology instruction.
• To disseminate the curriculum materials and model program nationally through faculty enhancement programs.

The NCE/AME was one of the first three centers funded by the NSF under the Advanced Technological Education Program (ATE). The center's objectives are to develop and disseminate novel manufacturing education approaches that prepare BS and associate degree graduates to contribute to the long-term improvement of manufacturing capability in the United States. Innovations in curriculum design, content, and pedagogy are being developed.

Initial funding for the center was for three years from January 1, 1995 through December 31, 1997. The work of the center will continue through the end of the year 2000 with three years of additional NSF funding. Continuation is planned beyond 2000 with revenues derived from a variety of sources.

While based in Dayton, Ohio, the work of the center is being carried out by a very large, geographically dispersed team of professionals from academia and industry.

Curriculum Content (the what):

The curriculum content team, chaired by Professor Robert Mott, Professor of Engineering Technology at the University of Dayton, organized the necessary body of knowledge for an Associate of Applied Science degree in Manufacturing Engineering Technology into approximately 80 modules. This organization achieves an integrated, just-in-time modular approach to the delivery of the competencies necessary for a manufacturing operations technician. This organization is consistent with the major themes proposed by SME in the Curriculum 2002 proceedings. [2.] By the end of the grant cycle, thirty two of the modules will be finished representing both foundation and manufacturing skills areas.

The foundations skills areas include:

• Mathematics
• Principles of Science
• Humanities, Communications and Team Building.

The manufacturing skills areas include:

• Manufacturing Processes and Materials
• Production and Inventory Control
• Quality Management
• Design for Manufacturing
• Manufacturing Systems and Automation
• Enterprise Integration

The modules are the basic building blocks of the curriculum. Each institution will be required to create their own curriculum by assembling modules into courses. Since all the modules are between 10 and 30 equivalent instructional hours in length, the modules could be delivered as separate one to three quarter credit hour courses or several modules could be assembled into one course.

A set of core competencies, embedded in every module, focus on how students think, how they communicate, how they interact with others, and how they use knowledge. Every module provides explicit practice

• in scientific thinking skills, ranging from the more academic tradition of scientific disciplines to applications of the Plan-Do-Study-Act cycle in manufacturing.
• planned practice and reinforcement of oral and written communication skills
• and of teamwork skills, not just because these skills are valuable in themselves but also because their use aids in the overall learning process.

In the course "Introduction to the Design Realization process three modules "Units and Conversions" a mathematics module, "Customer Satisfaction" an enterprise integration module and "Conceptual Design" a design for manufacturing module were combined with activities and materials reflecting the product realization cycle and tied together with an overall integrating activity.

Pedagogy (the how):

The how is concerned with earning. Our curricular materials support discovery and contextual learning and recognizes the all learners benefit from a whole-to-part instructional delivery.

Each module starts with the big picture in which learners, guided by the facilitator (instructor), consider a wide range of authentic contexts in which the competencies contained in the module are used. Some of those contexts are then the focuses of four to six authentic learning tasks that mirror the way the desired competencies are used in a high-performing industry. The desired competencies are first learned through the activities that make up these experiences.

An activity based learning theory based on constructivist principles guides the development of the learning modules. The use of the lecture mode is minimized in favor of involving students in a series of hand-on exercises called authentic learning tasks. [3.]

The Guiding Principles for module development ensure that the core competencies and other important skills are developed not only in focused modules but also within virtually all modules through the authentic learning tasks. Included are skills of planned inquiry, teamwork, oral and written communication, diversity and fair-mindedness in interpersonal relations, and global and societal awareness. [4.]

The materials emphasizes that learners need to be actively involved, reflect on their learning, make inferences and to experience cognitive conflict. The National Center developed and tested an instructional model that supports our learning beliefs. (see Figure 1. below)

But the learning theory used also emphasizes that learning and understanding are enhanced when the learner transfers that learning to a different context. Thus each module ends with a more comprehensive transfer activity that applies the module's competencies. Most of the modules will use the integrating manufacturing experience as that transfer activity.

The program concludes with a sizable capstone experience in which learners will apply many of the concepts and skills from the entire program to a current industrial application.

II. Development of the Mechanical Engineering Technology Course MET 104: Introduction to the Product Realization Process.

This course began in 1980 as an "Introduction to Mechanical Engineering Technology" and went through a major revision three years ago to incorporate activity based instruction and an emphasis on design not just basic analysis skills and career opportunities. [5.]

With the purchase of the course reference materials and the following descriptions with links will provide you with a clear understanding of the structure of this three quarter credit hour course (two lecture - two laboratory hours a week) Section III. Representative Student Results will provide further insight into student perceptions.

Course Objectives and Description

• To outline the career possibilities for engineering technologists.
• To introduce and reinforce the five step problem process for solving analytical problems.
• To provide opportunities to apply the engineering design process to real world problems.

Course Description

Fundamentals of the product realization process including engineering design and problem solving with emphasis on, dimensional analysis, design for manufacturability, and customer satisfaction.

Student Competencies for the Course

Course Materials:

Engineer's Toolkit: Engineering Design and Problem Problem Solving , written by Stephen Howell and published by Benjamin/Cummings, 1996.

Advanced Product Quality Planning and Control , APQP, published by AIAG, 1995.

Units and Conversion, written by Steve Crain, Cathy Mulligan and Tom Whitehead, published by Sinclair Community College through the NCE/AME, 1998.

Parts of Customer Satisfaction, written by Linda Alexander, Pat Galitz and James Houdeshell, published by Sinclair Community College through the NCE/AME, 1999.

Conceptual Design, written by Philip Doepker, Brian Knouff and Pat MacLellan, published by Sinclair Community College through the NCE/AME, 1998.

Grading Policies:

• Take Home Final Exam 35%
• Homework (six assignments) 10%
• Portfolio (binder with group work) 15%
• Project 25%
  • Report 15%
  • Individual Presentation 5%
  • Group Evaluation of Individuals 5%

Team Reports (both group and laboratory reports) 15%

Abbreviated Course Outline (List major content areas or units covered in the course.)

The Big Picture

Technological Team

Engineering Analysis Process

Team Building Activity: Authentic Learning Task #1: Participating on a Product Development Team

Units and Dimensional Consistency (7 hours)

Activities:

• Authentic Learning Task 1: The Concepts of Conversion, part 1. Volume Conversions
• Authentic Learning Task 2: The Concepts of Conversion, part 2. Deriving basic US-SI conversions Area, Mass and Temperature
• Authentic Learning Task 3: Working with SI units
• Transfer Activity: What is the weight of this part?

Communicating Results

Design Process

The Design Process: Designing the first Room Air Conditioner. Air Bags - too many constraints?

Problem Definition

• Big Picture
• Authentic Learning Task #1. Marketing Mix
• Authentic Learning Task #5. Customer Satisfaction

Collecting Information

• Authentic Learning Task #2: Customer Needs, Functional Requirements, Design Requirements and Design Criteria.

Generating Multiple Solutions

• Authentic Learning Task #3: Developing Conceptual Designs.

Analyze and Select a Solution

Manufacturability

• Authentic Learning Task #4: Identifying Manufacturing Processes

Functional Analysis

Product Safety and Liability

Authentic Learning Task #7: Performing a Fault Tree Analysis

Ergonomics

Engineering Economics

Decision Process

• Authentic Learning Task #5: Decision Analysis
• Test and Implement the Process
• Authentic Learning Task #6: Design Review Process

Concurrent Engineering

Forming Your Own Company

Transfer Activity: Modifying the Robotic Gripper to Meet Customer Needs

Scenario:

You are an employee of Robotic Grippers, Inc. (RGI) and serve as a member of the Product Development Team. One of your best customers, Get Your Bearings, Inc. (GYB), has asked RGI to modify a robotic gripper to accommodate steel ball bearings ranging in size from 1/4 inch to one inch in diameter. These ball bearings must be precisely placed on a conveyor system after they have been inspected on a Coordinate Measuring Machine (CMM). The position on the CMM and the conveyor will be precisely identified by GYB.

Present a competitive design that meets RGI's Product Development Process Steps, at our scheduled Design Review Meeting.

Discussion on the concept of the Transfer Activity

The program design being developed by the NCE/AME implements the concept of the transfer activity through an integrating manufacturing experience, in which the student gains an understanding of how each manufacturing oriented competency acquired is used in authentic activities within a single enterprise. This feature in the pedagogy mirrors some of the impact learned in a cooperative work experience by forcing the students to integrate what they have learned in several modules.

The implementation of the program at Sinclair Community College has created Robotic Grippers, Inc. (RGI) as a model that serves to illustrate the concept. A rather complete description of this hypothetical company has been developed that designs, manufactures, and delivers a line of standard and special-purpose grippers for use in a variety of robotic material handling applications. Product designs and specifications with real prototypes are available to the student groups

The organization of RGI has been described in a comprehensive manual and CD ROM that includes product engineering, manufacturing engineering, facility and equipment layout, production, quality management, purchasing and material control, marketing and sales, and the business functions of enterprise management. A customer base and a chain of suppliers has been defined. [6.]

Working with drawings and actual prototypes the students apply what they have learned in one context to a new context.

Students currently enrolled in the Quality Engineering Technology Program experience the following applications of the robotic gripper.

Section III. Student and Course Results

Winter Quarter 1999 Results:

Background:

During the Winter Quarter 32 students in two course sections completed the course. The day section was characterized as a mixture of Mechanical Engineering Technology students, Quality Engineering Technology and four General Motors Apprentices. Approximately 70% of the class was under 25 years of age and enrolled full time. The night section was made up of Mechanical, Quality, Manufacturing majors, and no apprentices. Approximately 80% of this class was older than 25 years of age and working full time. This difference in background was reflected in the quality and depth of their efforts on the homework and final exams. Both classes had high commitment levels to their groups and all groups (six groups in total) completed their projects successfully. Overall student reaction to the class differed by section, the night section had no complaints and overwhelming comments from the students were "it was the best class they had ever taken." The day section was bimodal in response based on the student's effort, with some students stating "they loved the class" and this was the "best class that they had had in their apprenticeship program" to " too much team activity and work in this course."

Assessment Issues:

The students were assessed in a group setting twice, by their team members and within a comprehensive open ended final exam that measured all the course competencies. The overall grades even with a high percentage of group effort reflected the students efforts and competencies. The rubrics provided in the modules set the competency standard and overall students that met all the competencies typically received an A in the course.

The students that did not do the work within the group were rated that way by their groups. The more successful groups typically rated each team members effort equally.

Example of student project:

Although not required in the project, one group created prototype "fingers". (see Figure Two.) Figure Three shows the 1/4 inch and one inch steel balls required to be picked up by the design.

FIGURE 2. ROBOTIC GRIPPER WITH"FINGERS"

FIGURE 3. BEARINGS

Section IV. Conclusions

This course has experienced a significant increase in enrollment which has required the adding of an additional section this year and with the popularity of this course with apprentices an additional section will be necessary next year.

The assessment efforts are extensive with eighteen separate recorded data entries for each student.

Students like the course, and cannot believe how quickly the three and one half hours go by. From an instructor standpoint the course is very satisfying to teach, but concerns related to providing the students additional opportunities to learn the competencies in another mode will be worked on in the future.

The author would like to thank the National Science Foundation for support of this curriculum project.

*Partial support for the National Center of Excellence for Advanced Manufacturing Education has been supplied by the National Science Foundation under grant number DUE-9454571. Any opinions, findings, and conclusions or recommendations expressed in this paper are those of the authors and do not necessarily reflect those of the National Science Foundation.

Section V. Cited References

[1.] Collins, Timothy, Gentry, Don, and Crawley, Vernon, Gaining the Competitive Edge: Critical Issues in Science and Engineering Technician Education, National Science Foundation, Division of Undergraduate Education, Washington D.C., July 1993.

[2.] Wells, David, Editor ,Manufacturing Education for the 21st Century, Volume I Curricula 2002, SME, Dearborn Michigan, 1995.

[3.] Dewey, John, Democracy and Education, Macmillan, New York, 1916 p.21.

[4.] Houdeshell, James, and Fred Thomas, (1996) "Integration of Liberal Studies into the Manufacturing Curriculum: The Use of Guiding Principles in Curriculum Development." Proceedings of the International Conference on Education in Manufacturing, March, 1996, Society of Manufacturing Engineers, Dearborn, Michigan.

[5.] Houdeshell, James, Teaching Design in a 100 Level Technology Course, Conference Proceedings ASEE North Central Region, April 1998.

[6.] Mott, Robert L. and Houdeshell, James J., Addressing Competency Gaps in Manufacturing Education, Manufacturing Education for the 21st Century, Volume V. Manufacturing Education for Excellence in the Global Economy, SME, 1998.

Biographical Information for the Author

JAMES J. HOUDESHELL is a Professor of Engineering Technology at Sinclair Community College in Dayton, Ohio teaching in the Quality Engineering Technology program. He is a principal investigator for the NCE/AME and has facilitated and contributed to the development of several modules. He has also facilitated workshops on the NCE/AME pedagogy at several sites in the U.S. and in Australia.

Definitions:

Learning is a process by which relatively permanent changes in behavior occur as a result of practice or experience.

A module is the basic instructional unit that organizes and integrates a set of authentic learning tasks, around a technology related activity. The module's context is defined through the use of a transfer activity, which is a rich learning experience that integrates several authentic learning tasks. The module embraces inclusion of the core compentencies, is just-in-time in nature, uses the constructivist approach to learning and enhances long term cooperation among technology, math and science teachers.

An authentic learning task consists of a discrete event or experience through which students acquire one or more competencies.

A transfer activity is a project assignment found within each module that reflects a real world problem. This task is sufficiently complex in nature that it requires several hours of effort to complete. This task encourages team work, stimulates students to make connections and generalizations about competencies learned and then apply them in a new way.

The integrative manufacturing experience is the context for the transfer activities found in every manufacturing module and provides the lattice for integrating the student's learning experience as he or she travels through the product realization process from design to production.

The Guiding Principles for module development were established early in the project to define a systematic framework within which all content will be taught. Rather than focusing on what the students should know, the Guiding Principles deal explicitly with how students think, how they communicate, how they interact with others, and how they use knowledge.

In each instructional module, students will practice and enhance the following competencies:

• Scientific Methods. Use scientific processes to formulate questions and plan investigations; collect and interpret data; formulate and revise explanations and models using logic and evidence; analyze alternative explanations and models proposed by others; and communicate and defend conclusions.
• Oral Communications. Effectively communicate with, listen to, and respond to others interpersonally, in teams, and through presentations.
• Written Communications. Demonstrate the ability to write with a purpose, in different formats, for a variety of audiences; and to organize, synthesize, and communicate the significance of either technical or non-technical information.
• Teamwork. Demonstrate in a group a cooperative effort to evaluate system performance, solve problems, and develop and implement plans and procedures.
• Diversity and Fair-Mindedness. Demonstrate a willingness to fair-mindedly assess the moral viewpoints or reasoning of others, regardless of one's own bias, as well as a willingness to imaginatively put oneself in the place of others in order to genuinely understand them.
• Global and Societal Awareness. Demonstrate an awareness of the relationship between each module and the local, national, or global community.
• Career Applications. Demonstrate how major concepts and processes of each module are applied to careers in science and technology.
  

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Student Competencies for MET 104 Design Realization:

Upon completion of this course the students will be able to:

From Units and Conversions

• Describe and define the primary units of measurements in the US Customary System
• Describe and define the primary units of measurement in the International Metric System
• Use Both the US and SI measurement systems in real-world problems and everyday situations as applied to length, area, dry volume, liquid volume, temperature, mass and weight or force.
• Develop the unit conversions between US and SI systems for the fundamental units in area, mass, temperature and volume.
• Use dimensional analysis to ensure quantities are reported in appropriate units.

From Customer Satisfaction

• Apply the elements of the marketing mix to a product or service.
• Apply a consumer research technique to identify elements of customer satisfaction.

From Conceptual Design

• Participate effectively on a Product Development Team.
• Articulate the essential characteristics of a Product Development Team.
• Derive functional requirements, design requirements, and design criteria based on customer requirements.
• Develop conceptual designs based on functional requirements, design requirements and design criteria.
• Present conceptual designs in the form of sketches and written narration that shows how specifications have been met.
• Identify appropriate manufacturing processes for a particular design.
• Perform a standard decision analysis.
• Present a final product design, including its manufacturing process, to a design review process committee.
• Respond effectively to a design review committee's questions and constructive criticism relating to conceptual design
• Complete a Fault Tree Analysis for the loss of a major function of a product.

Overall Course Integration:

• Apply a systematic approach to the solving of analysis problems.
• Relate marketing techniques to the design and implementation of the product design
• Demonstrate skills in teamwork and oral and written communications.

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Units and Conversions: Authentic Learning #1: Part 2. Basis US-SI Conversions:

Area Conversions

Step #1 Problem Definition

To empirically determine the relationship (conversion factor) between square feet and square meters

Step #2 Collect Information

Design a method utilizing the floor tile grid, an English/metric ruler and masking tape to estimate the conversion factor (a suggestion is to "count blocks")

Step #3 Calculate the Result

Create the conversion relationship from the experimental data

Step #4 Refine the Solution

Is your group pleased with the procedure? Should you refine the method in order to enhance the accuracy of the results?

Step #5a Test the Result

Test the results by comparing your conversion factor with published conversion factors and then calculate the % difference between the results.

Step #5b Lessons learned

Does your conversion factor compare favorably with the published value? If not, what contributed to the difference? Should the procedure be refined and rerun?

Mass Conversions

Step #1 Problem Definition

To empirically determine the relationship (conversion factor) between ounces and grams

Step #2 Collect Information

Design an experiment to determine the conversion from ounces to grams by utilizing a double pan balance, ounce weights and gram weights.

Step #3 Calculate the Result

Create the conversion relationship from the experimental data

Step #4 Refine the Solution

Is your group pleased with the procedure? Should you refine the method in order to enhance the accuracy of the results?

Step #5a Test the Result

Test the results by comparing your conversion factor with published conversion factors and then calculate the % difference between the results. Weigh one of the other oz weights and check the repeatability of the process.

Step #5b Lessons learned

Does your conversion factor compare favorably with the published value? If not, what contributed to the difference? Should the procedure be refined and rerun?

Temperature Conversions

Step #1 Problem Definition

To empirically determine the relationship (conversion equation) between Fahrenheit and Celsius temperature scale

Step #2 Collect Information

Design a method utilizing F and C thermometers with at least five significantly different measurement temperatures (i.e. range from 0F to 212F)

(the lab has a refrigerator freezer, ice, ovens and hot plates)

Step #3 Calculate the Result

Create the conversion relationship from the experimental data by plotting the data on graph paper (do a scatter plot). Your group should create an empirical equation that relates F and C

Step #4 Refine the Solution

Is your group pleased with the procedure? Should you refine the method in order to enhance the accuracy of the results?

Step #5a Test the Result

Test the results by comparing your conversion factor with published conversion factors and then calculate the % difference between the results.

Step #5b Lessons learned

Does your conversion factor compare favorably with the published value? If not, what contributed to the difference? Should the procedure be refined and rerun?

Time Conversions

What is the basic unit of time in the English System? in the International Metric System? What is the conversion factor?

Your Team should write a Laboratory Report with letter of transmittal (due in two class periods) that meets the departmental guidelines. (see syllabus handout)

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Customer Satisfaction Activities used in MET 104:

Authentic Learning Task #1. The Marketing Mix

Your firm has just purchased a tennis racket factory that as been closed for several years. As one of the first employees your task is to collect information to plan the future of this plant.

Your team has been assigned to outline a marketing plan for the company.

Begin by focusing on the questions found on the data sheets. Your team should discuss and formulate a marketing plan for the company.

When the facilitator calls for the teams to assemble, your spokesperson will report your team's ideas and elements of a marketing plan.

Authentic Learning Task #5. Customer Satisfaction

Your company, Super Star Athletic Shoes, has established some focus groups to get feedback on customer needs and degree of satisfaction with customers' most recent purchase of athletic shoes. Your team functions in two roles in this scenario - first, as one of the focus groups and second, as an analysis team to analyze the data from the focus groups.

Answer the questions found on the data sheet as individuals and share with your group and the rest of the class by using a flip chart to post the data to the other teams. Then perform your analysis by answering the questions found on data set two.

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Conceptual Design Activities used in MET 104:

Authentic Learning Task #1: Participating on a Product Development Team

Desert Survival Scenario

Authentic Learning Task #2: Customer Needs, Functional Requirements, Design Requirements and Design Criteria.

Your team will be assigned one of three design order requests to determine and present the customer needs, functional requirements, design requirements and design criteria for:

• A mousetrap that will kill the mice instantly without splatter.
• or an adjustable golf club for kids that will grow as they get older.
• or an electronic dictionary that will function as a bookmark.

Authentic Learning Task #3: Developing Conceptual Designs.

Your team will develop and present three different conceptual design from the customer needs, requirements and criteria developed for your product in ALT#2

Authentic Learning Task #4: Identifying Manufacturing Processes

Your team will develop a manufacturing process flow diagram for the three design developed in ALT #3. Present your results to the entire group.

Authentic Learning Task #5: Decision Analysis

Apply decision analysis techniques based on your criteria to the selection of the best design and process.

Authentic Learning Task #6: Design Review Process

Evaluate a presentation using the assigned check sheet to assess the effectiveness of the presentation. Develop an outline for presenting the results of your PDT.

Authentic Learning Task #7: Performing a Fault Tree Analysis

For your product your team should create a FTA for the loss of the major function of your team product, both product and process causes should be considered.

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Product Safety and Liability:

The Law Is

• A Matter of Policing
• Rationally formulated rules of Conduct
• Rationally formulated Principals of Justice
• The Legal Order of Things
• The Life of the Law has not been logic: It has been experience
• The Law consists of commands, obligations and sanctions

Social Reasons and Psychological difficulties make impossible any system of mechanical jurisprudence in a modern dynamic world

The Basic Myth, the common fallacy is that rules of law are predicable certainties.

Product Liability is based in tort law.

What is a tort?

• Latin for "to twist"
• A tort describes a person's act (or their failure to act), when there is no right or privilege to do so, and such act (or failure to act ) injures the person, property or reputation of another, either directly or indirectly.

It is a civil wrong (breach of duty) and not a contract violation (breach of contract)

• Contract liability is based on agreement between parties
• Tort liability is based on the duty one person owes to another.
• In a tort action the injured party is the plaintiff and the person charged the defendant.
• The plaintiff has the burden of proof to prove the elements of the case. (preponderance of the evidence)
• In a criminal action the plaintiff is the state (prosecutor) and must prove beyond a reasonable doubt.

Tort Categories

• Intentional Torts - Voluntary Violation
• Negligence - Unintentional
• Liability without fault (strict liability) based on an activity that is considered unduly dangerous.

Intentional Torts

To Persons

• Assault - An act by the defendant to intentionally cause apprehension of immediate or harmful offensive contact to the plaintiff's person
• Battery - Unprivileged intentional touching of another.
• Emotional Distress
• False Imprisonment

To Property

• Trespass to Land
• Trespass to Chattels (Personal Property)

To Person or Property

• Fraud/Deceit

Quasi-Intentional Torts

• Defamation
• Libel/Slander

Negligence

• Failure to Exercise Due Care
• Duty of Care - what an ordinary, prudent, reasonable person would do

To Prove Negligence

• Duty of Care (Standard of Conduct)
• Breach of Duty
• Proximate Cause
• Cause of Damage
• Standard of Conduct

Based on average mental ability, physical characteristics and knowledge.

Special Standards for Children

Breach of Duty

• First a Duty Must be Owed
• Nonfeasance (duty to do, but does not)
• Misfeasance (a right or duty, but does it improperly)
• Malfeasance (a duty not to do it, but does it anyway)

Liability Without Fault

• Trespassing animals "dog bites"
• Ultra hazardous activities

Product Liability

Product Liability is the legal responsibility which a manufacturer or seller has to compensate persons who are injured as a result of using their product.

• Product must be defective
• Inherently dangerous or imminently dangerous (based on neglect)

Liability Regarding Seller's Representations

• Express Warranty (Uniform Commercial Code)
• Implied Warranty (Fitness for Use)
• Intentional Misrepresentation

Liability Regarding Product

• Negligence (Conduct)
• Implied Warranty (UCC - Unreasonably Dangerous Product)
• Strict Liability (Unreasonably Dangerous Product)
• Doctrine of Privity (Who owes the Duty)

Causation

• Fault (Only need to show defect)
• Proximate Cause
• There must be a connection "But For" test
• Res Ipsa Loquitor "It speaks for itself"

Defenses

• Contributory Negligence
• Assumption of Risk

Plaintiffs defense against Contributory Negligence

1. The P placed himself in peril

2. The P was unaware of the peril

3. The D knew of the peril

4. The D was able to prevent the injury

5. The D failed to use due care

Let's Look at Some Cases

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Engineering Economics:

Engineering Economy

• Defn: the application of principles of economics to the problem of engineering related investments
• Opportunity Costs
• Cost of Capital
• Inflation
• Sunk Cost
• Time Value of Money
• Question: If I borrow $100 from you and guarantee to pay your $100 back in a year, are you going to jump at the opportunity?

Present Worth

• Defn: PW is the benefits that I receive in the future (F) equated to their equivalent present value (P)
• Single payment:
• P = F( 1/ (1+i)N)
• N = number of compounding periods
• i = interest rate per compounding period

Future Worth

• Defn: FW is the benefits that I will receive in the future based on an investment today.
• F = P (1 + i)N

   

  Example: FW

  My company invests $10,000 in the stock market.

  What will my investment be worth before taxes in 10 years with i = 8%, 10%, 12%?

  F = $10,000(1+.08)10 = $21,589

  10%?

  12%?

Uniform Series Payments

• If we invest a fixed annual payment (A) then the Future Worth will be defined as
• F = A ((1+i)N -1)/i

Example: Our company will invest $100/month for the next 10 years What will our future worth be at 12%/year, 10%, 8%?

FW = 100 ((1+.01)120-1)/.01 = $23,004

Sinking Fund (Uniform Series Capital Recovery)

• What annual payment do we have to pay to retire a loan (P) at a set interest rate (i) at N periods.
• A = P (i(1+i)N/(1+i)N-1))

  Example:

  We borrow $10,000 @12% interest as startup capital. What will our monthly payment be based on a 10 year loan?

  A = $10,000 (.01)(1.01)120/(1.01)120-1

  A = $143/mo.

Inflation

• Over the time period in the US from 1913 to 1994 the Consumer Price Index rose from 29.7 to 444.0 (1967 = 100)
• What is the annual rate of inflation over that 81 year period?

  F= P(1+i) N solve for i

  i = (F/P)1/N -1 = (444/29.7)1/81 -1

  i = 0.03395 = 3.4%

Inflation (selected countries 1988 to 1991)

• Japan 7.4%
• Sweden 8.6%
• US 4.6%
• Yugoslavia 549 %
• Brazil 1257%
• Mexico 23%

Taxes

• Assume a incremental 28% tax rate for individuals or a corporate rate of 34%. Then with a 3.4% Annual inflation rate becomes a pretax cost of inflation of 4.5%
• Question: if you invest $10,000 in a 10 year CD earning 6% interest, how much is your investment worth given the effects of Inflation and taxes.

Break Even Analysis

Final Question

• If You win the Ohio lottery i.e. $3 million paid out at $150,000 year for 20 years.
• What is the present worth given that the state will receive 6% interest on the money?
• P = A ((1+i)N - 1)/( i (1+i)N)

Can you quit your job?

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Forming Your Own Company:

So you want to go into business

• Partnerships, Corporations and Limited Liability Companies

Possibilities

• Sole Proprietorships (Schedule C)
• Partnerships (Schedule E K-1)
• Corporations

• Closed
• Open
• S-Corporation

• Limited Liability Corporation

Sole Proprietorship

• Just You
• You are liable for screwups
• Easiest to set up

Partnerships

• At least two people
• Easy - but requires some agreements between partners
• Higher document requirements for tax purposes

Corporations

• Requires at least one person
• Requires issuance of shares
• Election of a Board of Director(s),Officer(s)
• Everyone is an employee except board members
• Complicated tax situation requires accountant
• Can save lots of tax dollars/ limits liability
• Required to file articles of incorporation

Organization

• Shareholders elect
• Board of Directors who hire (appoint)
• Officers (President, VP, Treasurer and Secretary) who hire additional
• Employees
• Can be organized as a regular corporation and then elected as a chapter S for tax purposes

Limited Liability Companies

• Just like a partnership but requires the partnership to file articles of organization
• Limits Liability of Partners

Organization

• Partners elect
• Managing Partner and other managing partners who hire
• Employees
  

Let's look at necessary forms to startup a company in Ohio:

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