1. When conducting a cost analysis, what are the risks, costs and benefits? How is critical thinking techniques used to weigh these factors? (about 325 words should be a good explanation). Thank you!
Let's take a closer look. I also included two examples which often are helpful in understanding concepts.
1. When conducting a cost analysis, what are the risks, costs and benefits? How is critical thinking techniques used to weigh these factors? About 325 words should be a good explanation. Thank you!
It depends on the problem that you are evaluating be using a tool referred to as a cost/benefit analysis.
In fact, the cost/benefit analysis is a powerful and widely used and relatively easy tool for deciding whether to make a change. To use this tool certain steps need to be taken. First, to use the cost/benefit analysis, a person must work out how much making the desired change will cost. Second, the person will then calculate the benefit that the change will bring to them. When using this tool, where costs or benefits are paid or received over time, the person needs to work out the time it will take for the benefits to repay the costs. The cost/benefit analysis can be carried out using only financial costs and financial benefits (see example 2 below). However, others might decide to include intangible items within the analysis, and then, the person will need to use critical thinking to estimate a value for these, thus bringing in an element of subjectivity into the process. However, larger projects are evaluated using formal finance/capital budgeting, which takes into account many of the complexities involved with financial Decision Making (Source: http://www.mindtools.com/pages/article/newTED_08.htm).). Critical thinking techniques are used at every stage of the cost analysis, however, as decision making at each level demand critical thinking skills to make the best analysis and judgments about the costs, benefits and potential risks (see below).
Quality Cost Analysis
There is another tool referred to quality cost analysis proposed by Joseph Juran. Quality costs are the costs associated with preventing, finding, and correcting defective work. These costs are huge, running at 20% - 40% of sales.  Many of these costs can be significantly reduced or completely avoided. One of the key functions of a Quality Engineer is the reduction of the total cost of quality associated with a product. Examples of costs include prevention costs, appraisal costs, internal failure costs and external failure costs. The total cost of quality would be the sum of these four costs (Prevention + Appraisal + Internal Failure + External Failure - total cost of quality). (See example 1 below).
What are the risks? Gryna (1988)  and Juran & Gryna (1980)  point out several problems that have caused cost-of-quality approaches to fail such as the following:
1. It's unwise to try to achieve too much, too fast. For example, don't try to apply a quality cost system to every project until you've applied it successfully to one project. And don't try to measure all of the costs, because you probably can't.
2. Beware of insisting on controversial costs. Gryna (1988)  points out several types of costs that other managers might challenge as not being quality-related. If you include these costs in your totals (such as total cost of quality), some readers will believe that you are padding these totals, to achieve a more dramatic effect. Gryna's advice is to not include them. This is usually wise advice, but it can lead you to underestimate your customer's probable dissatisfaction with your product. (http://www.kaner.com/qualcost.htm)
Critical thinking techniques are used through cost analysis. Here are 16 basic techniques of critical thinking which might be used at various stages of the anlaysis:
1. Clarify. State one point at a time. Elaborate. Give examples. Ask others to clarify ...
Through example and discussion, this solution provides insight regarding the conducting a cost analysis, what are the risks, costs and benefits, and how critical thinking techniques is used to weigh these factors, References are provided.