How can identifying cost reductions contribute to reaching goals in a more affordable manner?

Cost-Benefit Analysis (CBA) contributes to making data-driven, precise decisions by providing a systematic approach to estimate the strengths and weaknesses of alternatives. It can be used to determine options that provide the best approach to achieve benefits while preserving savings. For instance, in business, the CBA is often used to decide whether a proposed project will bring in a profit, and whether it's worth the investment. It involves comparing the total expected cost of each option against the total expected benefits, allowing the decision maker to identify the option that makes the most economic sense.

Assigning a dollar amount to every cost and benefit in a Cost-Benefit Analysis is significant as it allows for a tangible comparison between the two. This quantification facilitates decision-making by providing a clear view of the financial implications of a proposed project or decision. If the total benefits outweigh the total costs, it suggests that the project or decision is financially viable. Conversely, if the total costs exceed the benefits, it indicates that the proposal may need to be reconsidered or alternatives explored.