Opportunity Cost

Core rule: every commitment displaces its best alternative. Report both that forgone value and the net value delta; decide on the delta, not the chosen path alone.

When to Use

• Allocating scarce time, headcount, budget, or attention across competing options
• Feature prioritization, build-vs-buy, tech-debt vs product work
• Saying yes to a large commitment that displaces other work
• Comparing a bold path against polishing the status quo when windows may close

When NOT to Use

• Trivial or cheaply reversible choices where analysis costs more than the resource
• No real alternative use (resource is idle, earmarked, or non-fungible)
• Mandatory work (compliance, security fix, hard dependency) with no optional alternative
• Inventing speculative alternatives only to look rigorous when the next-best is clearly worse

Procedure