Problem Solving Techniques #7: Cost-Benefit Analysis

[@Commandodesigns]

Yeah, he's got the terms flipped in the last slide. That's why it's confusing. He should have Benefits on Top and Costs on Bottom. It's not wrong, just unnecessarily confusing. What he is actually showing is the Benefit to Cost ratio.

[@JarodThurley]

This was very informative. Thank you for creating this video. I am doing a Diploma of Project Management and I am performing a cost benefit analysis of my project. You have a new subscriber!

[@HT-rq5pi]

I think it is an error to calculate the cost benefit ratio. We should be considering the net benefit, which is NB = Total Benefit - Total Cost. Proportions do not matter, money is valued in absolute terms. Getting $10 000 worth of benefits for $1 000 costs (CB ratio = 10, net benefit = $9000) is not better than $15 000 worth of benefits for $2 000 costs (CB ratio=7.5, net benefit=$13 000).

[@sniperrana]

Could you please tell that how you calculate the benefit for a software? I have no idea the financial impact by installing a new software in organization

[@MikeTaylorEastStaffordshire]

Really clear and straightforward information. Thank you!

[@mrsmarshmallow15]

Based on what do you set the numbers of the benefits? Is it just estimation?

[@jindagi_ka_safar]

simple, quick , effective ..........thanks a lot

[@denisgritsiyenko]

The main question I have is how did you convert the benefits into money?

[@sharmisthadeysarkar2976]

Yesss

[@joannajones8533]

That was My question too :)

[@shengurion]

so simple, clear, and useful. i used this link for my report. thanks!

[@gayathria7704]

well said. Clear and concise

[@vinaypathak1171]

Very Clear And To The Point Explanation 👍 .Thanks

[@sarawanie90]

Good day sir. I have a question. how you get the benefit in monetary value? how you quantify? any methods that you used?

[@HoustonToDinosaur]

Choosing solution B from that table because it has the highest BC ratio is not necessarily correct and that is a flawed analysis method. You have to look at the incremental BC ratios on a challenger-defender basis to actually determine the most efficient alternative.

[@bIuez71]

its KISS, Keep It Simple and Smart thank you and best regards

[@Srinjoy20]

Great video! Saved my day 😃

[@rickyjaygomez8031]

Nice! I hope you could also make a discussion about benefit to cost analysis using utility function as a financial measure of benefits :)

[@PuppetThieves]

how do you go about putting values costs and benefits that don't have an intrinsic value?

[@sattya9671]

The presentation is really good. Can i have some insight about the time period being considered for the analysis. As cost will be quite instant with training and AMC over a period of time but benefit accrues and increases gradually.kindly comment...

[@EugeneOLoughlin]

Hi Satya, You'll need to visit your library to study this some more - in the example in the video no time period is being considered. You may find another one of my videos which takes into account the time value of money useful: "How To... Calculate Net Present Value (NPV) in Excel 2003 ". In KZbin search for the watch code "dqc5n4nMbVI". Dr E.

[@sattya9671]

Thanks for your instant reply and suggestion... Look forward to more studies in the similar fashion...

[@himanshusapsd]

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[@ruyidakhan3139]

Wonderful video

[@srinivasaraosahukari1535]

Super analysis. I hope it may useful for all all categories

[@sharongrillenberger1024]

Good afternoon Mr O'Loughlin Firstly, thank you very much for your videos, they have helped me immensely. I have no technology knowledge at all so apologise in advance for what is possibly a very simple question but has caused me huge headaches not to mention time wasting. Every month I have a spreadsheet 42 rows down and 54 columns wide, now my problem is that the data in only a quarter of those columns (not all the same either) change every month so how do I "lock" the cells that must not be altered and get my cursor to automatically jump to the next correct cell? Thanking you in advance Sharon

[@sivapc]

Thanks for the clear explanation, sir. Much appreciated

[@salisuusman639]

13 years later and wow👏

[@allnaturalstore]

Great help!

[@andreanicole7035]

Thank you!

[@Anon-.-]

politicians use CB analysis a lot and they consider much more than finance, it doesn't work very well when they do but they do use it.

[@inshayarkhan842]

Xcellence