Cost analysis is the process of estimating the individual and comparative costs of alternative ways of accomplishing an objective. The goal is not to forecast precisely accurate costs, but rather to reveal the extent to which one alternative costs more or less than another. A cost analysis is often conducted in conjunction with an effectiveness analysis to aid in the selection of one alternative over others.
EVOLUTION
Cost analysis emerged as part of a broader initiative in the late 1940s and early 1950s to apply economic principles to the decision making process of the Department of Defense (DoD). A confluence of events following World War II resulted in a dramatic and enduring change in the way resource allocation decisions were made in public organizations. The development and evolution of cost-effectiveness analysis and cost analysis occurred nearly simultaneously and are therefore closely related. Both types of analysis make use of operations research methods.
Operations research...
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© 2001 Kluwer Academic Publishers
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Balut, S.J., Gulledge, T.R. (2001). Cost analysis . In: Gass, S.I., Harris, C.M. (eds) Encyclopedia of Operations Research and Management Science. Springer, New York, NY. https://doi.org/10.1007/1-4020-0611-X_174
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DOI: https://doi.org/10.1007/1-4020-0611-X_174
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