What is Analysis of Alternatives?

An analysis of alternatives (AOA) is an assessment of various options present for reaching a goal. This usually involves sensitivity analysis, which is when the evaluation of quantitative estimations and calculations gets changed in an orderly way to assess their effect on the end result. 

Examples include, life-cycle costing (which is a costing method that considers the expenses at each stage of an asset's life cycle duration), and cost-benefit analysis (which is the process of measuring the benefits and costs of a choice or project along with the alternatives to have an unbiased scale for assessment). 

How does Analysis of Alternatives Work? 

An analysis of alternatives provides a foundation to always assess and compare the advantage of various solutions for providing necessary capability to certain end users. 

The usually process of an AoA includes:

• Plan: Define supported decisions and objectives, identifying stakeholders, defining the timing, effort, or funding, creating the study team, setting up the study plan
• Organize analysis framework: Identify the analysis problem statement, scope, context, and foundation for alternative contrasting. Set up assumptions and ground rules that outline the analysis.
• Define alternatives: Through extensive research, filtering, and examining, identify several options which focus on the established problem within the scope and context defined.
• Analyze alternatives: Assess each option against the criteria set up.
• Compare alternatives: Decide what the relative advantages of the various solutions are as revealed by the analysis
• Report results: Record the results that are supportive of the needs of the decision-maker or stakeholder.