Saturday, February 15, 2014

What is an Opportunity cost in Project Management?

In Project Management area, Opportunity Cost term refer to profit or value that you give up by not choosing a project. For example, if you are asked to select one project from three different projects, what you will choose

Projects Profit Duration
Project A $30,000 20 weeks
Project B $55,000 18 weeks
Project C $65,000 21 weeks

Looking at the profit and time duration you may select Project C over other projects. In that case you will give up Project A and Project B. The profit that you would have earned from Project A ($30,000) and Project B ($55,000) is called “Opportunity Cost”.

Here are some of the videos on Opportunity Cost that you can enjoy from YouTube.



What is Opportunity Cost?



Opportunity Cost: iPhone vs X-Box



Multiple Opportunity Cost




Bank of PMP Questions


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