functional cost analysis

Functional cost analysis is a method used to evaluate and compare the costs associated with different functions or activities within an organization or project. Instead of focusing solely on individual expenses, it looks at the value provided by each function to identify areas where costs can be optimized without compromising performance. This approach helps decision-makers understand how resources are allocated, identify inefficiencies, and prioritize investments to improve overall efficiency and effectiveness. By analyzing costs based on their purpose or function, organizations can make more strategic and informed financial decisions.