How to Measure the Benefits and Costs of a Project

It is important to measure benefits and costs, since everything can be quantified, before or after implementing a new system at work. In this case, implementing a 9/80 schedule where employees work nine hours for four days of the week and take Friday off. In order for the measurement to be done, a survey has to be taken after the implementation of the system. Employees could be asked how they feel about this new system after about two weeks of using it. Further, the survey could be carried out in terms of the services that the employees are offering and the returns that the company is getting. The benefit here could be that the employees are more enthusiastic about work throughout the week thus giving their full potential. However, customers need services and products daily and when the employees are not working on Friday, the possible returns that the company would get on that day is lost. 

In designing a benefit-cost analysis for the hydroelectric dam project in Batundaland, the World Bank is bound to meet certain aggregation problems because the project has both multiple advantages and disadvantages. The challenge to be dealt with is weighing the benefits of having electric power against the cost of highly widespread illness which is expensive to treat. When computing the cost and benefits, decisions have to be made over data to be included and those that should be weighted. The first challenge entails aggregation over people where it has to be determined whether benefits should go to specific people; for instance the rich or poor, or whether people from all walks of life should be treated equally. The second problem during the analysis is aggregating over products. The cost of the project is in building the dam, and the benefits come from electricity generated by the dam. Here, the time value of money has to be looked at. It is usually troublesome when the people funding the project are not sure of a steady market for the product. Another problem is weighing the current cost of the dam and the future benefits in aggregation over time. This is important because if the future benefits are not worthwhile, then there is no need for funding the project. In every project, there are possible risks and uncertainties which should be taken into consideration. For instance, it should be considered that in the dry seasons of the year, the electricity output will be minimal thus the benefits would, as a result, be minimal. Moreover, one cannot be certain that the project would be well received. Lake created by the dam will cause an outbreak of bilharzia which will claim people’s lives thus people around the dam may reject the project.