Decision Analysis

Decision Analysis
Cost-Benefit Analysis
Cost-benefit analysis is a technique that is used to compare the strengths and weaknesses of the strategies used in doing a project. It is used to determine the best approach that will yield the maximum benefit and is also used to compare the cost and benefits of a given decision policy in a project. The major aim of this approach is to determine if an investment is sound by analyzing whether the benefits outweigh the costs and also comparing projects through comparing the total expected cost of each of the total expected cost of each option against its total expected benefits (Brent, 2007).
Strengths of Cost-Benefit Analysis
The strength of this approach is that when performing the cost-benefit analysis, it gives a chance for one to get into the specifics about the expected payouts of each decision depending on the payoff of each strategy. This shows that the method will be able to compare the benefit of the strategies even before its implementation.
Another strength of the strategy is that it is some rational decision criteria in that the decision maker can get all rational and relevant information required. Therefore the decision maker has an opportunity to gather all the relevant information to make a rational decision about the strategies, and they can select the most rational strategy that will be able to maximize their benefits (Brent, 2007).
Weaknesses of Cost-Benefit Analysis
The weakness of this approach is that it ha…