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This term has many different meanings. In the sense adopted for the Handbook, systems analysis is an explicit formal inquiry carried out to help someone (referred to as the decision maker) identify a better course of action and make a better decision than he might otherwise have made. The characteristic attributes of a problem situation where systems analysis is called upon are complexity of the issue and uncertainty of the outcome of any course of action that might reasonably be taken. Systems analysis usually has some combination of the following: identification and re-identification) of objectives, constraintS, and alternative courses of action; examination of the probable consequences of the alternatives in terms of costs, benefits, and risks; presentation of the results in a comparative framework so that the decision maker can make an informed choice from among the alternatives. The typical use of systems analysis is to guide decisions on issues such as national or corporate plans and programs, resource use and protection policies, research and development in technology, regional and urban development, educational systems, and?alth and other social services. Clearly, the nature of these problems requires an interdisciplinary approach. There are several specific kinds or focuses of systems analysis for which different terms are used: A systems analysis related to public decisions is often referred to as a POLICY ANALYSIS (in the United States the terms are used interchangeably). A systems analysis that concentrates on comparison and ranking of alternatives on basis of their known characteristics is referred to as decision analysis.

That part or aspect of systems analysis that concentrates on finding out whether an intended course of action violates any constraints is referred to as FEASIBILITY analysis. A systems analysis in which the alternatives are ranked in terms of effectiveness for fixed cost or in terms of cost for equal effectiveness is referred to as COST-EFFECTIVENESS analysis. COST- BENEFIT ANALYSIS is a study where for each alternative the time stream of costs and the time stream of benefits (both in monetary units) are discounted (se?DISCOUNT rate) to yield their present values. The comparison and ranking are made in terms of net benefits (benefits minus cost) or the ratio of benefits to costs. In risk-BENEFIT ANALYSIS , cost (in monetary units) is assigned to each risk so as to make possible a comparison of the discounted sum of these costs (and of other costs as well) with the discounted sum of benefits that are predicted to result from the decision. The risks considered are usually events whose probability of occurrence is low, but whose adverse consequences would be important (e.g., events such as an earthquake or explosion of a plant). See: operations research (IIASA)

The diagnosis formulation, and solution of problems that arise out of the complex forms of interaction in systems, from hardware to corporations, that exist or are conceived to accomplish one or more specific objectives. Systems analysis provides a variety of analytical tools, design methods and evaluative techniques to aid in decision making regarding such systems. (Krippendorff)
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