What Is Cost-Utility Analysis?

Cost-utility analysis refers to comparing costs with the utility of a project, and is called cost-utility analysis.

Cost-utility analysis

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Cost-utility analysis refers to comparing costs with the utility of a project, and is called cost-utility analysis.

Comparing costs with the utility of a project is called cost-utility analysis. The cost effectiveness is measured by the formula of cost and utility, which reflects the cost and price paid by the unit utility. When the cost of different investment schemes is equal, the scheme with high efficiency is preferred; when the efficiency of different investment schemes is equal, the scheme with low cost is preferred.

The basic procedure for cost-utility analysis is:

(1) Clearly specify the goals or tasks to be completed by the project;
(2) propose alternative schemes for completing the task requirements;
(3) Evaluation by the utility cost method;
(4) Hierarchical arrangement of the evaluated plans;
(5) Sensitivity analysis of the scheme;
(6) Written documents explaining the results of the analysis.