What is Cost Benefit Analysis?
Cost Benefit analysis or CBA is a strategic method of estimating the strengths and weaknesses of the alternatives that enable businesses to satisfy their operations, transactions, activities and other requirements.
This is a technique that is used to determine the options of providing the best approach for the adoption as well as practicing with the focus on benefiting the labor, time, and cost savings, etc.
The CBA is defined as a systematic approach used to calculate and compare the benefits of a project that may influence the decision of the company. In the case of HAZOP and Risk identification, the analysis allows experts to compare the benefits towards the health, safety culture, and environment against the cost of investment required for it. This determines the associated impact of no investment, part investments, as well as full investments. Along with this, the experts may also consider technologies and innovations to achieve substantial benefit and lower investment levels.
Purposes of CBA
CBA has two purposes:
How CBA Can Benefit You
CBA considers the costs and benefits of all your investments over a given time period. Therefore, looking at the net investment value against the benefits can help you design and analyze a long-term investment and project plan.