Evaluate the Alternatives:

In this particular step managers evaluate each of the alternatives, both quantitatively and qualitatively.

Qualitative Concerns

The managers ought to be very thoughtful at how each alternative fits the total capacity strategy and other aspects of the business not covered by the financial study. Specific concerns are about the uncertainties about demand, technological change, competitive reaction, and the cost estimates. Some of the factors may not be quantified therefore have to be accessed on the basis of judgment and experience. Others may be quantified and therefore each alternative may be analyzed using different assumptions about the future. One set of assumptions could represent a worst case, where demand is less, competition is greater, and construction costs are higher than expected. Another type of the alternative is "what-if" analysis, which permits the managers to get an idea of each alternative's implication before making a final choice.