Marginal analysis is the principle of maximizing profit by looking at the entire cost of production.

When making a partial change within an operation that has existed well for a while, it may be wise to closely view just that part. Partial budgeting can begin with a listing of pros and cons for the planned change. The total pros should outweigh the cons over the long-run. The following chart is an example of this practice reflecting a thought to increase the number of livestock in an existing operation.

Pros   Cons  
Increased income from more stock sales $___ Decreased income from hay sales $___
Decrease expenses in haying process and storage rooms. $___ Increase in expenses for purchasing stored feed $___

Total: $___   $___