Final answer:
Business and economics employ various analytical methods such as Alternatives Analysis, Cost-Benefit Analysis, Earned Value Analysis, Root Cause Analysis, Trend Analysis, and Variance Analysis to aid in decision-making. These methods assist in comparing options, examining costs and benefits, measuring project performance, identifying actual issues, predicting future trends, and understanding outcome discrepancies.
Step-by-step explanation:
Understanding Various Analysis Methods in Decision-Making
When it comes to decision-making in business and economics, there are several analytical methods that can be utilized to determine the best course of action. Here are some of the analyses mentioned: Alternatives Analysis involves comparing different choices to find the best option.
Cost-Benefit Analysis is where potential costs and benefits of a decision are compared, often using a T-shaped chart, with costs on one side and benefits on the other. This process evaluates the balance between marginal costs and marginal benefits.
Earned Value Analysis is used mostly in project management to measure project performance and progress. Root Cause Analysis aims to find the original cause of a problem to ensure that it is fixed rather than just addressing its symptoms.
Trend Analysis involves looking at historical data over time to predict future movements. Variance Analysis is used to analyze the difference between planned outcomes and actual outcomes.
These analysis methods are used to examine a problem from multiple perspectives, analyze causes and effects, and help a decision-maker assign value to different aspects of a decision, especially when dealing with non-quantifiable items.