A facility director is evaluating whether it is worthwhile to complete a project. The best approach would be to:

A facility director is evaluating whether it is worthwhile to complete a project. The best approach would be to:

• A. Conduct a productivity study
• B. Determine the startup funds needed
• C. Determine the number of people involved
• D. Conduct a cost-to-benefit analysis

Answer: (D)

To decide if a project is worthwhile, you compare the expected costs with the expected benefits. A cost-benefit analysis does this by listing all costs (capital, operating expenses, downtime, maintenance) and all benefits (cost savings, productivity gains, revenue, quality improvements) and expressing them in the same unit, typically dollars. This produces a net benefit or a benefit-to-cost ratio, making it clear whether the project adds value and by how much, which is essential for prioritizing investments. Other approaches don’t directly judge value. A productivity study looks at current efficiency and may highlight potential improvements, but it doesn’t quantify whether the overall investment is worth it. Determining startup funds shows how much money is needed upfront, not whether the project’s returns justify the cost. Knowing how many people are involved concerns implementation scope, not the financial justification of the project.

To decide if a project is worthwhile, you compare the expected costs with the expected benefits. A cost-benefit analysis does this by listing all costs (capital, operating expenses, downtime, maintenance) and all benefits (cost savings, productivity gains, revenue, quality improvements) and expressing them in the same unit, typically dollars. This produces a net benefit or a benefit-to-cost ratio, making it clear whether the project adds value and by how much, which is essential for prioritizing investments.

Other approaches don’t directly judge value. A productivity study looks at current efficiency and may highlight potential improvements, but it doesn’t quantify whether the overall investment is worth it. Determining startup funds shows how much money is needed upfront, not whether the project’s returns justify the cost. Knowing how many people are involved concerns implementation scope, not the financial justification of the project.