Project selection methods are concerned with the advantages or merits of the product of the project. In other words, selection methods measure the value of what the product, service, or result of the project will produce and how it will benefit the organization. Selection methods involve the types of concerns executive managers are typically thinking about. This includes factors such as market share, financial benefits, return on investment, customer retention and loyalty, and public perceptions. Most of these are reflected in the organization's strategic goals. Projects, whether large or small, should always be weighed against the strategic plan. If the project doesn't help the organization reach its goals (increased market share, for example), then the project probably shouldn't be undertaken.
There are generally two categories of selection methods: mathematical models (also known as calculation methods) and benefit measurement methods (also known as decision models). Decision models examine different criteria used in making decisions regarding project selection, while calculation methods provide a way to calculate the value of the project, which is then used in project selection decision making.
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