Course syllabus for Managerial economics

Course syllabus adopted 2026-02-03 by Head of Programme (or corresponding).

Overview

  • Swedish nameIndustriell ekonomi
  • CodeIEK415
  • Credits7.5 Credits
  • OwnerTKELT
  • Education cycleFirst-cycle
  • Main field of studyIndustrial Engineering and Management
  • DepartmentTECHNOLOGY MANAGEMENT AND ECONOMICS
  • GradingTH - Pass with distinction (5), Pass with credit (4), Pass (3), Fail

Course round 1

  • Teaching language Swedish
  • Application code 50115
  • Maximum participants90
  • Minimum participants20
  • Open for exchange studentsNo

Credit distribution

0198 Examination 4.5 c
Grading: TH		 4.5 c
0298 Project 3 c
Grading: TH		 3 c

In programmes

Examiner

Eligibility

General entry requirements for bachelor's level (first cycle)
Applicants enrolled in a programme at Chalmers where the course is included in the study programme are exempted from fulfilling the requirements

Specific entry requirements

The same as for the programme that owns the course
Applicants enrolled in a programme at Chalmers where the course is included in the study programme are exempted from fulfilling the requirements

Course specific prerequisites

-

Aim

The field of Industrial Engineering and Management aims, among other things, to create a bridge between technology and economics/management in industrial firms. The purpose of this course is to introduce and provide an understanding of fundamental concepts and models for the management and efficient use of resources in industrial firms.

Learning outcomes (after completion of the course the student should be able to)

  • understand the meaning of the basic terminology of managerial economics
  • understand and analyse the economy at different levels within a firm
  • understand when different economic calculation models are appropriate in different situations
  • apply different economic calculation models
  • understand the content of the annual report and apply financial analysis
This implies that the student shall be able to:
  • define and explain the meaning of various fundamental economic concepts
  • understand, construct, and explain a firm’s financial situation (results: profit and/or loss) based on volume relationships. Key concepts include fixed and variable costs, revenues, break-even volume or break-even revenue, profit or loss, and margin of safety. The student shall also be able to explain the appearance, implications, and characteristics of profit (cost–volume–profit) diagrams in relation to capital-intensive and labour-intensive industries.
  • understand, construct, and calculate the costs of products or projects using different types of product costing methods. This includes calculating the components of, and total full cost according to, process costing and absorption costing.
  • understand, construct, and calculate the costs of products or projects using contribution margin analysis. Key concepts include differential revenues, differential and common costs, contribution margin, and total contribution margin. The student shall also be able to construct and analyse multi-step contribution margin statements with differential and common costs at different levels. For industrial firms, optimisation shall be possible in three situations: with idle capacity, with a bottleneck, and with multiple products, as well as with two products and two or more bottlenecks.
  • understand, construct, and calculate the full costs (total costs) and profitability of products, projects, customers, or markets using activity-based costing (ABC). Important concepts include activities and cost drivers. Cost per activity occurrence and per cost object shall be understood and calculated, as well as profitability.
  • understand, construct, and calculate various economic indicators for investment projects, i.e. long-term investments. Investments shall be classified and ranked. Key concepts to be understood and calculated include initial investment, net cash inflows, residual value, discount rate, economic life, net present value (NPV), profitability index, annuity and annuity factor, payback period (with and without discounting), and internal rate of return (IRR). Calculations shall be possible with and without taxes. Based on these values, consequences and recommendations regarding investments shall be analysed.
  • state and explain the content of an annual report
  • analyse a firm’s economic/financial situation (based on the balance sheet and income statement in the annual report) along several dimensions, such as profitability (return on total capital and return on equity), short-term liquidity (cash ratio and current ratio), and long-term solvency and survival capacity (in relation to potential future losses), i.e. solidity. Using the leverage formula, the student shall be able to analyse return on equity in relation to financial risk (the balance between equity and debt). Using the DuPont model, the student shall be able to analyse several underlying dimensions of profitability, primarily profit margin and asset turnover, as well as further underlying drivers of these dimensions.

Content

  • Introduction to managerial economics
  • Costing based on variable and fixed costs
  • Costing based on direct and indirect costs
  • Costing based on differential and common costs
  • Linear programming
  • Investment appraisal
  • Annual report
  • Financing
  • Financial analysis

Organisation

The course comprises the following components:

  • Formal lectures on the course content
  • Supervision of the project work

Literature

Isaksson, A., Lantz B., och Löfsten H., 2026, Industriell ekonomi – grundläggande ekonomisk analys, ISBN 978-91-44-15801-3, edition 3:1, Studentlitteratur, Lund.

Examination including compulsory elements

The assessment is based on the following components:

  • An individual, three-hour written examination
  • A written report on the project work

The course examiner may assess individual students in other ways than what is stated above if there are special reasons for doing so, for example if a student has a decision from Chalmers about disability study support.

Managerial economics | Chalmers