Unit 10 Project

me27

Can someone please tell me how you would measure cost effectiveness....
I'm stuck !!!!

visha

A measure of cost effectiveness is obtained by measuring COSTS against objective OUTCOMES.

Analysing cost effectiveness of a recommendation can be evaluated by reviewing a number of alternatives in implementing that recommendation and considering other alternatives to improve the outcome. Identify the best alternative in terms of OUTCOME and COSTS.

Therefore you need to identify the Cost and Outcomes of your recommendation:

Outcomes are the result of your recommendations………………………Costs could be
Employees paid on time………………………………………………..............…BACS cost against Use of Cash costs
Invoices produced and posted on time…………………….....……………..Software costs
Debtors chased on time……………………………………..............……………Extra Staff / Overtime /
Goods delivered on time………………………………………..........…...……...Use of Courier company
Management accounts produced accurately and in time ……………..Computers/ staff / overtime etc

Your analysis does not have to be Quantitative but can be Qualitative. Therefore if your recommendations are to change work practice then there may not be an implication on increase or decrease of costs but certainly improvement in the quality of the objective outcome.

me27

Thanks a lot Visha. I'll try it...