Differential analysis

Differential analysis,

Definition of Differential analysis:

  1. Decision making technique in which evaluation is confined to only those factors which are different or unique among possible alternatives. It usually involves four steps: (1) compute all costs associated with each alternative, (2) ignore the sunk costs, (3) ignore costs that remain largely constant among the alternatives, and (4) select the alternative offering the best cost-to-benefit ratio. Also called incremental analysis or relevant cost analysis.

Meaning of Differential analysis & Differential analysis Definition