Cost-benefit Analysis

The decision-making process in which the costs and benefits of each countermeasure alternative are compared and the most appropriate alternative is selected.

Source:API STANDARD 780, Security Risk Assessment Methodology for the Petroleum and Petrochemical Industries, First Edition, May 2013. Global Standards

Cost-benefit Analysis (CBA)

Definition: Analytic technique used to compare alternatives according to the relative costs incurred and the relative benefits gained

Sample Usage: Cost-benefit analysis allowed risk practitioners to make recommendations between two different screening systems.

Extended Definition: typically measured in monetary terms.

Annotation: The analysis can incorporate discounting calculations to take into account the time value of money.

Source: DHS Risk Lexicon, U.S. Department of Homeland Security, 2010 Edition. September 2010 Regulatory Guidance

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