Analysis of Alternatives - Decision Making

The video tutorial discusses approaches to decision-making, focusing on assessing options through sensitivity analysis. It highlights the assessment of options model, commonly used in life cycle costing and cost-benefit analysis. The process involves planning, organizing, identifying criteria, defining alternatives, analyzing, comparing, and reporting results. The analysis of alternatives is emphasized as a method to determine the best course of action by comparing various scenarios.

What is the primary focus of sensitivity analysis in decision-making?

• Determining the exact cost of a decision

• Exploring the impact of variable changes on outcomes

• Calculating the depreciation of assets

• Identifying the best alternative without analysis

Which of the following is an example of where the assessment of options is commonly used?

• Product design

• Employee training

• Life cycle costing

• Market research

What is the main goal of cost-benefit analysis?

• To increase production

• To enhance customer satisfaction

• To compare costs and benefits of options

• To reduce employee turnover

What is the first step in the analysis of alternatives process?

• Reporting results

• Running simulations

• Planning and organizing

• Implementing the chosen alternative

In the analysis of alternatives, what is done after defining the criteria and alternatives?

• Focusing on unrelated factors

• Ignoring the alternatives

• Analyzing and comparing them

• Directly implementing the first option