Cost benefit analysis

cost-benefit analysisIn order to decide between alternatives, cost-benefit analysis are valuable. A regularly occuring challenge is to quantify the effect of the various alternatives. This requires the ability to see the full picture and to assess the overall effect of each option. It also requires measures to quantify the effect, and that you are able to obtain the facts.

Six Sigma involves practical application of statistics, focusing on neutral information and fact based decisions. Six Sigma involves a strong focus on evaluating several options, quantify things and calculate the effect of different initiatives; what are the visible results on the bottom line? This makes Six Sigma well suited for cost-benefit analysis. To make the right decision it is important to evaluate pros and cons and calculate the cost-benefit effect of the various alternatives. It does not need to be 100% correct, 90% is usually more than enough to make the right choice.