Benefit/Cost Analysis

Making final Decision with Benefit/Cost Comparisons

Sometimes it may be not enough to create hierarchical structure of the Plan of Analysis, assign weights and Utility Functions and calculate ratings of alternatives. If your decision problem may be described in Benefit/Cost terms, it is more reliable to use Benefit/Cost Comparisons at the final stage of the analysis.

For example, you compare cars and you created Plan of Analysis including General Parameters: "Driving", "Safety", "Economy". Every General Parameter is influenced by number of Parameters. So "Economy" may be influenced by "Price" and "Expenses".

To run Benefit/Cost Analysis you have to split up "Efficiency Indicators" and "Cost Factors". How to do it? Pretty simple! Just assign zero weight coefficient to the General Parameter representing "Cost Factors" . In our example it is "Economy".

General Parameter	Weight	Qty	Edit	Delete
Driving	0.66	3	Edit	Delete
Safety	0.34	3	Edit	Delete
Economy	0.00	4	Edit	Delete

After running comparative analysis you will get ratings for all General Parameter including "Economy", and at the same time exclude influence of the "Cost Factors" on the final ratings of the alternatives.
And then you can apply Benefit/Cost comparisons to the results of group analysis - just click button "Benefit/Cost analysis" at page with group results.

You will be asked about axes for Benefit/Cost chart. Select "Final Rating of the Alternative" as Axis Y (Benefit) and Rating of General Parameter "Economy" as Axis X (Cost). For axes you can select as well value of any numeric parameter of yor alternatives, for example 'Price'. Also you can select estimated value of any parameter - it means value of the Utility function for choosen parameter.

Click button 'Apply' after you selected axes, and you will see your alternatives at the chart. To view values of alternative for both axes just place mouse pointer over dot with the name of alternative. Color of dots reflect results of the dominant analysis: Green dots -Dominating (Best) Alternatives, Yellow - not dominated, Red - Dominated (Worst) Alternatives.

Here you can reset axes, work with experts or just click button 'Compare' and start simple Benefit/Cost analysis as a number of pairwise comparisons of alternatives at the chart. For every pair of alternatives you have to decide which one of two is more preferable considering their benefits and costs.

After completing the comparisons system shows the bar chart with final ratings of alternatives resulting from Benefit/Cost Analysis.

If group of experts is working on the project, every expert should run its own comparisons, and than you can calculate co-ordinated results of the Benefit/Cost Analysis - just click button 'Concordance' above the list of experts!