Jfjhfjgjg Essay

1322 WordsMar 7, 20136 Pages
Amity Business School Amity Business School MBA, Semester IV ENV Dr. Anshu Yadav 1 Cost Benefit Analysis Cost–benefit analysis (CBA), sometimes called benefit–cost analysis (BCA), is a systematic process for calculating and comparing benefits and costs of a project, for deciding on the "project". CBA has two purposes: • To determine if it is a sound investment/decision (justification/feasibility), • To provide a basis for comparing projects. It involves comparing the total expected cost of each option against the total expected benefits, to see whether the benefits outweigh the costs, and by how much. 2 History • Jules Dupuit, a French engineer, first introduced the concept of Cost-Benefit Analysis in the 1930s. • The British economist, Alfred Marshall, formulated some of the formal concepts that are at the foundation of CBA. • The practical development of CBA came as a result of the impetus provided by the Federal Navigation Act of 1936. The Ford Pinto case "The Pinto was not to weigh an ounce over 2,000 pounds and not cost a cent over $2,000." • During design and production, however, crash tests revealed a serious defect in the gas tank. In crashes over 25 miles per hour, the gas tank always ruptured. To correct it would have required changing and strengthening the design. • • • • TRUE SUBCOMPACT Size Weight LOW COST OF OWNERSHIP Initial price Fuel consumption Reliability Serviceability CLEAR PRODUCT SUPERIORITY Appearance Comfort Features Ride and Handling Performance Safety, you will notice, is not there. It is not mentioned in the entire article. As Lee Iacocca was fond of saying, "Safety doesn't sell." • Cost-Benefit AnalysisOne of the tools that Ford used to argue for the delay was a "cost-benefit analysis" of altering the fuel tanks. According to Ford's estimates, the unsafe tanks would cause 180 burn deaths, 180 serious burn injuries, and

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