In procurement, the cost-benefit analysis is used to determine what?

• A. The fastest supplier selection
• B. The ability to negotiate lower prices only
• C. A comparative assessment of total costs and expected benefits to determine value for money
• D. Whether the contract includes performance-based payments

Answer: (C)

The main concept tested here is evaluating value for money through a cost-benefit framework in procurement. Cost-benefit analysis weighs all costs and all expected benefits of a decision, often over the life of the asset or contract, and compares them to see whether the benefits justify the costs. This typically involves quantifying benefits and costs, possibly discounting future values to present value, so you can determine if the overall result is favorable. The goal is to pick the option that delivers value for money, not simply the fastest supplier or the lowest price in isolation, and not be driven by contract features like performance-based payments. Therefore, the option that best matches this idea is the one describing a comparative assessment of total costs and expected benefits to determine value for money.