Tutorial | January 2006

Alternative Choice Decisions Analysis

by David F. Hawkins, V.G. Narayanan, Jacob Cohen and Michele Jurgens

Abstract

Shows how managers use information on costs and revenues to decide between possible alternative courses of action. Presents two case examples of differential cost analysis. The first, a make or buy decision, examines two alternatives in which only costs vary. The second presents a situation in which both revenues (changes in price and volume) and costs (including fixed costs) change. Both analyses allow students to act as managers and conclude which of several alternatives yields the greatest differential profits.

Keywords: Cost; Profit; Revenue; Information; Management Analysis, Tools, and Techniques; Problems and Challenges; Conflict and Resolution;

Citation:

Hawkins, David F., V.G. Narayanan, Jacob Cohen, and Michele Jurgens. Alternative Choice Decisions Analysis. Harvard Business School Tutorial 105-706, January 2006.