2

YEAR

2011

VOLUME

FOUR

Management and leadership consulting  Cost benefit analysis   

performance  metric

 

    Subject:  

  Cost Benefit Analysis

  for Decision Making

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CBAfaculty.orgText Box: Why do we need to do CBAs?
To support resource-informed decision making.  DoD has issued a policy that calls for a CBA to accompany any request to the senior leaders for new or expanded resources.  Many other federal agencies also have adopted the policy at their respective levels and are requiring CBAs.  The CBA is a tool to help leaders make better decisions by providing clear choices that carefully weigh costs, tradeoffs, and benefits. 

When do we need to do CBAs?
A CBA is needed to support a decision for new or expanded resources.  To allow for review of the CBA, one should plan ample time for its review in the decision making process. 

Who does CBAs?
Any organization can be asked to prepare a CBA.  A decision-making body will ask for a CBA in order to support resource-informed decision making. 

What needs to be included in a CBA?
An effective CBA will include a clear  problem statement and will present feasible alternative courses of action (COA) that  address the problem or opportunity.  Every CBA must clearly define the assumptions, facts, and constraints that bear on the problem or opportunity; explain how the COAs were identified and evaluated; and include supporting  documentation that shows how the cost  estimate for each COA was developed.  If the recommended COA includes an unfunded requirement, the CBA must also identify the proposed billpayer.  Our CBA  guide provides a step-by-step process that explains each of these  requirements. 
Text Box: Cost Benefit Analysis (CBA)
Frequently Asked Questions

Multi-Criteria Decision Making

Decision Making with Uncertainty

Optimization Modeling

Simulation Modeling

Spreadsheet Modeling

Elements of a Decision Analysis

Risk and  Decision Strategies

Statistical Modeling

Simple Additive Weighting

helping organizations achieve process improvement and cost saving

 

Cost Benefit Analysis

1

Introduction to Cost-Benefit Analysis

2

Conceptual Foundations of Cost-Benefit Analysis

3

Microeconomic Foundations of Cost-Benefit Analysis

4

Valuing Benefits and Costs in Primary Markets

5

Valuing Benefits and Costs in Secondary Markets

6

Discounting Benefits and Costs in Future Time Periods

7

Dealing with Uncertainty: and Sensitivity Analysis

8

Option Price and Option Value

9

Existence Value

10

The Social Discount Rate

11

Predicting and Monetizing Impacts

12

Valuing Impacts from Observed Behavior: Experiments & Quasi Experiments

13

Valuing Impacts from Observed Behavior: Estimation of Demand Curves

14

Valuing Impacts from Observed Behavior: Indirect Market Methods

15

Contingent Valuation: Using Surveys for Information on Costs and Benefits

16

Shadow Prices from Secondary Sources

17

Shadow Prices: Applications to Developing Countries

18

Cost-Effectiveness Analysis

19

Distributionally Weighted Cost-Benefit Analysis

20

How Accurate Is CBA?

Engineering Economy

1

Introduction to Engineering Economy

2

Cost Concepts and Design Economics

3

Cost Estimation Techniques

4

The Time Value of Money

5

Evaluating a Single Project

6

Comparison and Selection Among Alternatives

7

Depreciation and Income Taxes

8

Price Changes and Exchange Rates

9

Replacement Analysis

10

Evaluating wit Benefit-Cost Ratio Method

11

Breakeven and Sensitivity Analysis

12

Probabilistic Risk Analysis

13

The Capital Budgeting Process

14

Decision Making  Considering Multi-attributes

15

Solve Engineering Economy Problems w Excel

Cost Benefit Analysis docs

Introduction to Cost-Benefit Analysis

Conceptual Foundations of CBA

Basics of Cost Benefit Analysis

Valuing Benefits and Costs

Supply Demand Curves

Discounting Future Benefit and Cost

Expected value, Sensitivity analysis

Option Price

Existence Value

Social Discount Rate (SDR)

Estimates via Demonstrations 

Valuing Policy Impacts

Market Price Impact

Direct Elicitation Methods

Estimates of Shadow Prices

CBA in Developing Countries

Cost-Effectiveness Analysis (CEA)

Distributional Weighting in CBA

Evaluate the Accuracy of CBA