Evaluation Of Alternatives Inwards Conclusion Making - Techniques

Evaluation of Alternatives inwards Decision Making

After making all the alternatives, the adjacent stride inwards blogspot.com//search?q=planning-first-primary-important">planning or inwards blogspot.com//search?q=planning-first-primary-important">decision making is to evaluate these alternatives. Evaluation is required inwards club to direct the best choice for implementation.

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While evaluating alternatives, the managers must compare the choice plans or decisions. For this, the managing director must watch the quantitative as well as qualitative factors.

1. Quantitative Factors : The quantitative factors are those factors that tin last measured numerically. For e.g. Number of units sold, costs inwards rupees, etc. The quantitative factors are tangible inwards nature.
2. Qualitative Factors : The managing director must too watch the qualitative factors. The qualitative factors are intangible inwards nature for e.g. lineament of labour force, client satisfaction, etc.

The management must laissez passer on importance non alone to quantitative factors exactly too to qualitative factors. For e.g. An first-class production conception could non range its targets, due to bad lineament of labour force, pitiful maintenance of machines, etc.

Techniques for Evaluation of Alternatives

The methods or techniques for the evaluation of alternatives are:-

1. Marginal Analysis : To evaluate alternatives, a managing director may purpose the marginal analysis technique. The marginal analysis technique helps to compare additional revenues alongside additional costs. If the additional revenue is greater than the additional costs, to a greater extent than lucre tin last made past times producing more. However, if the additional revenue is less than the additional costs, to a greater extent than lucre tin last made past times producing less.
2. Cost Effectiveness Analysis : This technique is an improvement of the traditional marginal analysis. In this case, the managing director considers the cost-benefit analysis. The choice that provides the maximum benefits at the minimum damage is selected. The damage tin last measured inwards terms of money, time, risk, goodwill, etc. The principal characteristic of damage effectiveness analysis is that it gives importance to the results.