ECO.1:4 - Solution

ECO.1:4.1 - Recover the decision and the consequential numbers

Name the actor’s choice, the useful result sought and the period in which resources must be available. Separate alternatives that produce different results or leave different obligations. Reuse the resource and cash-flow account already prepared by MA or FIN.

Follow only numbers whose interpretation can change that choice. For each, ask what it denotes: an offered exchange, a past transaction, a budget allocation, an anticipated future exchange, a forgone alternative or a weight in a model. Recover the quantity, quality, location, time and access conditions that matter. “Steel at 500” is not yet a price for a specified supply.

ECO.1:4.2 - Connect the comparison to feasible exchange and use

For an offered exchange, determine what can be obtained at the stated terms and by whom. A quotation for an incompatible specification or unavailable delivery window cannot supply this plan. A supplier’s offer remains an offer until the relevant commitment is made.

For a resource already controlled, identify the alternative use actually displaced. Its historic cost and its current economic consequence may differ. For a novel resource or arrangement, use a comparable offer only after stating the difference that matters; otherwise retain a conditional value or compare physical alternatives and purposes directly.

Keep a model’s weights attached to its objective and constraints. A shadow price can show which constraint is costly within that model. Calling it money does not establish a buyer, a supplier, an exchange or a right to obtain resources at that amount.

ECO.1:4.3 - Return the comparison that the grounds support

Pass the usable quantities and timing to the existing accounting or financial calculation. State separately any important result that is not represented in the monetary account, such as preserving access for an affected community. The decision may use several criteria and leave alternatives incomparable.

If a missing price could change the answer, choose an attainable next move: seek a relevant offer, propose an exchange through ECO.3, compare a bounded range, or choose from already sufficient physical and purpose-based grounds. Additional investigation is justified by the decision it can change. Stop when the current choice is supported at the needed scope, including an explicit conditional choice where that is the useful result.