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Benefit-Cost Analysis

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  1. Cost-benefit analysis is the calculation of positive and negative effects of implementing an already planned decision. The calculation is a two-way path whereby the positive sides of a plan are compared to the negative sides and then a decision is made in regards to the results, whether to carry on with the plan or to drop it. The purpose of cost-benefit analysis is to assist financiers and managers in making the right decisions by considering all variables.
  2. Tangible cost is the value incurred or saved by opting for one decision and leaving out another whereby in practice can be felt or touched. For example, a gadget fan who is also a marketer decides to buy iPhone 3GS because it costs $315 after foregoing the iPhone 4S which is more powerful and much more reliable regarding the research done by the customer – iPhone 4S selling at $499. After the end of the deal, the marketer goes home with $184 as saved money. Intangible cost is the cost that one does not realize when he/she makes a decision but later incurs a loss. For example, the marketer chooses to buy the cheaper iPhone but in the long run, he finds out that it cannot satisfy his marketing needs and criteria hence limiting his proficiency.
  3. As a student taking various subjects, I realized that in some of the subjects I was not scoring to my expectations. It occurred because I was concentrating more on certain subjects while allocating very little time to others. Having run a decision matrix, I allocated more time to social studies. Below is the decision matrix used:

Day of Week

Time allocated 1

Time allocated 2

Time allocated 3

Verdict

Monday

1%u25BA

2

3

         Inadequate

Tuesday

1

2%u25BA

3

Medium

Wednesday

1

2

3%u25BA

           Adequate

Thursday

1

2%u25BA

3

Medium

Friday

1%u25BA

2

3

         Inadequate

Saturday

1%u25BA

2

3

         Inadequate

Sunday

1%u25BA

2

3

         inadequate

Figure 1 denotes less than 2 hours a days (inadequate), 2 denotes 2 to 4 hours (medium), and 3 denotes sufficient time of 5 hours and above. Base score was set to be 14 and below, which meant I needed more time. A score of 16 and 20 was medium for average grades, while a score of 21 hours was sufficient, my score for social studies was 11, and I chose to spend a lot more time in order to perform better.

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