How to rationally select among alternatives in long term projects with CDA-ESM

Today we discuss how to rationally select among alternatives in long term projects with CDA-ESM.

This post is companion to the already published: How to get the most out of (Vegetable) Waste Oil for your Small or Medium Business. 

How to rationally select among alternatives in long term projects with CDA-ESM

CDA-ESM can help you to select the best option. CDA-ESM is about rationally select among alternatives in long term projects with CDA-ESM.

We use an ”average sized” fast food restaurant or any equivalent Vegetable Waste Oil (VWO) producing business. The aim is to show the benefits of rational decision making using an innovative alternative evaluation methodology called CDA/ESM. CDA-ESM stands for Comparative Decision Analysis/Economic Safety Margin.

CDA/ESM is particularly useful when comparing long term projects. That is because its “risks included” cumulative cost evaluation eliminates the “zeroing effect” and the “rosy scenario syndrome” linked to Net Present Value (NPV). It has already been shown in many instances that attempts to tweak the NPV to include risks are generally misleading.

In the  Full Paper you will see how data are inserted and the results of the CDA-ESM compared to traditional NPV.

Tagged with: alternatives, Analysis, based, Comparative, decision, design, economic, environmental, making, NPV, projects, risk, ROI, selection

Category: Consequences, Hazard, Probabilities, Risk analysis, Risk management, Tolerance/Acceptability

One response to “How to rationally select among alternatives in long term projects with CDA-ESM”

1. Our clients beat the trends. We are proud to contribute to their leadership. « Riskope Risk and Crisis Management Blog says:

   June 9, 2011 at 4:11 pm

   […] Financial Comparison of long term alternatives, including upside and downside risks have been performed for large environmental remediations (asbestos dump, arsenic stocks, etc.). […]

   Reply