OPPORTUNITY COST - ECONOMIC CONCEPT USED FOR THE DECISIONS TAKING PROCESS

As our society develops from a scientific and technical point of view, the decision taking process becomes harder and harder. We all, economic agents and individuals, have to face physical and pecuniary constrains, which is why every moment and in every field, we deal with opportunity costs. As opportunity costs are those costs that do not require consumption or actual payments, the opportunity costs assessment is not carried out in compliance with the accounting system of the costs. Most of the times, opportunity costs are assessed by theoretician economists and sometimes, by managers. Although accountants are not interested in finding out these opportunity costs, all managers should establish them, because they are an important factor in the decisions taking process, regarding strategy orientation towards one of the possible ways of using the available resources. The objective of every business man is to gain profit. Therefore, he must implement strategies that increase his profit and assure a certain advantage over the other competitors. In order to reach this major objective, the business man must be capable of taking decisions that are based on the opportunity cost analysis. The general definition of the opportunity cost is the following: the value of an alternative which is waived, in favor of another one. The existence or two or more alternatives always involves losses and opportunity costs. In order to decrease and even to eliminate them, it is necessary to identify all possible alternatives and establish economic effects for every alternative, to compare them and to chose one of them. Therefore, the issue which arises is precisely the opportunity cost analysis for every variable and taking the relevant decision - minimizing the opportune cost. In this paper, we shall make a general theoretical review of the opportunity cost notion and its possible forms.