CEA (Cost-Effectiveness Analysis)

The CEA method was developed in the 1950s in the United States as a tool for decision making between the requirements imposed mainly by the Department of Defense and Army weapons programs and so on.

It is a method of objects or alternatives evaluation. The purpose of a cost-effectiveness analysis is to determine which project / program or variant project / program can achieve its objectives at the lowest cost. A CEA is used to identify the most cost-efficient strategy from a plurality of variants which have similar results and to select

Given that a cost-effectiveness analysis (CEA) is closely related to a cost-benefit analysis (CBA) and that both are economic evaluations of alternative-resource use and cost-measures, INESAN uses them in the same manner as the evaluation of completed projects / programs.

INESAN is capable of using the CEA method for completed projects to compare different alternatives with similar objectives and to measure their effectiveness. It is also used in the assessment of the expected impacts of alternative measures before they are implemented (ex-ante) or to assess the effectiveness of measures already implemented (ex-post).

INESAN uses an ex-ante CEA at an early stage in the process of program / project to identify the most cost-effective options. INESAN works with assumptions and projections of costs and efficiency options in different contexts in order to predict the impact of future actions. On the other hand, ex-post CEA is specifically used for cases where the target was set to assess whether the program / project effectively solved.

The results of an CEA are often integrated into a multi-criteria analysis (MCA) - link - which allows the combination of different criteria for decision making in a variety of formats.

 

 

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