Identify the options being compared
Determine the benefit or value of the chosen option
Determine the benefit or value of the next best alternative
Subtract the value of the chosen option from the value of the next best alternative
Use the formula: Opportunity Cost = Value of the next best alternative – Value of the chosen option
If comparing costs, include both explicit and implicit costs
If comparing time, assign a value to the time spent on each option
If comparing profits, use the forgone profit from the alternative option
Choose the alternative with the highest net benefit as the benchmark
Calculate the difference between that benchmark and the selected option