Once alternative courses of action have been identified, each alternative has to be analyzed and evaluated in the light of its strength and weakness and its fitment in achieving the organizational goals. While evaluating alternatives, managers should consider facts like the costs involved, how resource intensive it is, the time frame for completion, the gestation period, return on investment, etc.
Major challenges of effective evaluation can be uncertainty about the future and risk. Various intangible factors which are not within the control of the management like market changes, socio-economic-political factors, etc. Also have a bearing. At this stage, managers can use operations research, and mathematical as well as computing techniques to predict and analyze alternatives.