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5 Types of Cost Analysis

 , updated on January 24, 2022
Cost analysis is the process of modeling costs to support strategic planning, decision making and cost reduction. The following are common types of cost analysis.

Estimates

Developing and validating forecasts of costs. A fundamental step in planning a business, strategy, program or project.

Lifecycle Cost Analysis

Calculating the expected total cost of ownership of an asset over its lifespan.

Cost-Benefit Analysis

Modeling and comparing costs and benefits such as product development costs versus revenue. Typically uses estimates such as payback period and return on investment.

Efficiency

Measures of cost efficiency based on the efficiency formula.

Cost Effectiveness

Cost effectiveness is the process of comparing the costs of strategies relative to results where results aren't purely financial. For example, comparing different ways to improve your quality of life according to cost and non-financial results such as happiness.
Overview: Cost Analysis
Type
Definition
The process of modeling costs to support strategic planning, decision making and cost reduction.
Related Concepts

Financial Analysis

This is the complete list of articles we have written about financial analysis.
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Cost
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Liquidity
Opex
Overhead
Payback Period
Spending
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