Question

In which of the following methods of management is the benefit measured in natural units?

• A. Program budgeting system
• B. Network analysis
• C. Cost-effective analysis
• D. Cost-benefit analysis

Answer 1

The Correct Option is C

In management methods, the measurement of benefits can vary depending on the approach.

• Program budgeting system: This method focuses on allocating financial resources to various programs to achieve specific outcomes. Benefits are typically measured in financial terms.
• Network analysis: Often used in project management, network analysis helps in planning and controlling projects. It does not specifically focus on measuring benefits in natural units.
• Cost-effective analysis: This method is designed to compare the relative costs and outcomes of different courses of action. The key feature of cost-effective analysis is that benefits are measured in natural units (such as health outcomes, years of life saved, etc.), rather than monetary units. This allows decision-makers to evaluate effectiveness based on tangible, non-monetary outputs.
• Cost-benefit analysis: In this approach, both costs and benefits are quantified in monetary terms to ascertain the net economic impact of a decision.

Based on these explanations, benefits measured in natural units are a characteristic of Cost-effective analysis.