COST-EFFECTIVENESS ANALYSIS AS A MANAGEMENT TOOL,

The potential value of cost-effectiveness analysis as a management tool is discussed. Such analyses can be useful because they suggest an examination of alternative ways of attaining a given objective or goal, because they focus attention on selecting appropriate objectives and relevant variables, and because they require identification and quantification of these factors. While such apparent precision may sometimes lead to unwarranted confidence in the results, any management decision is affected as much or more by such short-comings, independent of costeffectiveness analysis. On balance, then, the identification, quantification, and systemization of cost-effectiveness analyses adds to the likelihood that the resulting judgment decision is a good one.