Link: https://theknowledgeeconomy.wordpress.com/2023/02/10/cost-benefit-analysis/
A cost-benefit analysis is a tool that can be used to help make a decision by evaluating the potential costs and benefits of each option. Here are the steps for conducting a cost-benefit analysis:
- Identify the options: Determine the options that are being considered.
- Identify the costs and benefits: For each option, identify the potential costs (e.g., time, money, resources) and benefits (e.g., increased efficiency, improved outcomes).
- Assign monetary values: Assign monetary values to the costs and benefits, if possible, to help compare them more effectively.
- Calculate the net benefit: For each option, calculate the net benefit by subtracting the costs from the benefits.
- Compare the options: Compare the net benefits of each option to determine which one provides the most value.
- Make a decision: Based on the comparison, choose the option that appears to provide the most value.
By following these steps, you can use a cost-benefit analysis to help make a decision in a structured and objective way, based on an evaluation of the costs and benefits of each option.
