Capital Planning and Budgeting
Not all criteria are of equal importance. Some are essential to a project; others are relatively minor in significance. Although it may be tempting to simply create a checklist and pick projects or equipment that meet the most criteria, planners should also be cognizant of the relative importance of their criteria and factor that into their decision making.
Analysis may be simple or complex, depending on the local government's needs and capabilities. The only tool needed is a standard spreadsheet or even a calculator. A first step is to determine if any criterion is "pass/fail" - in other words, if the criterion makes the project essential (or prohibits it). Legal mandates and health and safety issues may fall into this category for many governments.
Once this is determined, remaining criteria should be weighted. To do this, determine the most important criteria and give that the highest weight - say, a 10. Then compare the remaining criteria's relative importance to this criterion. In the following example, we will assume that there are three criteria:
We will assume the most important of the three is "needed for health and safety" and that the other two will be scored in relative importance to that, as illustrated below:
|Needed for health or safety||10|
The next step in the analysis will be to assign scores to each project.