cost-benefit-analysis

name	cost-benefit-analysis
description	Use when deciding whether an action is worth the resources, attention, or tradeoffs required. Use when applying the Cost Benefit Analysis consulting method and when a user asks for Cost Benefit Analysis, method execution, structured diagnosis, or action planning.
license	Apache-2.0

Cost Benefit Analysis

Use this skill to run Cost Benefit Analysis as a practical consulting method, not as a generic framework explanation.

Method Notes

• Compare against a clear baseline.
• Include timing, confidence, opportunity cost, and downside case.

Required Inputs

Collect or infer these inputs before execution:

• option or investment
• benefit estimates
• cost estimates
• time horizon
• risk assumptions

If an input is missing, do not block automatically. Mark it as missing, state the assumption used, and add a validation action.

When Not To Use

Do not use when material costs and benefits cannot be compared over a common time horizon. Treat non-negotiable legal, safety, or policy constraints as gates rather than averaging them into a financial total.

Adjacent Methods

• break-even-analysis: calculate the threshold volume, price, or time.
• decision-matrix: compare options across non-financial criteria as well as economics.

Step-by-Step Execution

Step	Required input	How to execute	Output
Define baseline	Current state, proposed option, time horizon.	State what the option is compared against.	Baseline and option definition.
Estimate benefits	Revenue, savings, risk reduction, learning, strategic value.	List benefits by type, owner, timing, and confidence.	Benefit estimate table.
Estimate costs	Fixed cost, variable cost, time, coordination, opportunity cost.	List costs and timing, including hidden effort.	Cost estimate table.
Compare scenarios	Benefits, costs, assumptions.	Calculate or reason through base, upside, and downside cases.	Scenario comparison.
Recommend threshold	Scenario comparison and constraints.	Recommend go/no-go/test-first and assumptions to validate.	Cost-benefit recommendation.

Output Template

### 1. Decision Baseline
Decision:
Baseline / do-nothing case:
Time horizon:
Discount / timing assumption:

### 2. Benefits And Costs
| Item | Type | Amount / range | Timing | Evidence | Confidence |
|---|---|---|---|---|---|
|  |  |  |  |  |  |

### 3. Scenarios
| Scenario | Net value | Key assumption | Downside |
|---|---|---|---|
|  |  |  |  |

### 4. Recommendation And Threshold
Recommendation:
Break condition:
Owner:
Validation action:

### Evidence And Next Decision
- Confirmed facts:
- Assumptions:
- Missing evidence:
- Next action, owner, and timing:
- Expected signal and decision threshold:

Quality Gate

• Produce the method-specific outputs for Decision Baseline, Benefits And Costs, Scenarios; do not substitute a generic framework summary.
• Tie every material score, causal claim, or stakeholder judgment to evidence or label it as an assumption.
• Include at least one disconfirming check, sensitivity, alternative explanation, or failure condition appropriate to the method.
• Convert the result into a named action or decision with an owner or stakeholder, timing, and observable signal.
• State missing inputs and the smallest validation action instead of inventing precision.
• Keep wording professional and plain enough that a smart non-specialist can use the output directly.