it is based on RITA V 7  P104

They are Project Selection methods

Project Selection Methods questions appear frequencty in PMP.  There are two broad categories of project. 1) Organization signs a contract with another Organization to execute a project under the terms & conditions mentioned in the contract.

2) Project is driven by the business need of org. and there is no external contract. For eg: Project started to automate a given process.

Regardless of the above two types, there is a formal process of selecting project in all organization to make best use of limited corporate resources. The choice will depend upon which of the projects are more profitable for organization.

Now when you compare one project with other competing project, it is the Benefit Measurement Method

If you use a mathematical model of calculating whether the project is financially viable or not and this method is called Constrained Optimization Method.

Just remember this for your PMP.

Benefit Measurement Method: Reviews a set of activities to ensure that integrated change programmes and projects are implemented and managed with a sustained focus on benefits realisation. .

Constrained Optimization Method: In the simplest case, this means solving problems in which one seeks to minimize or maximize a real function by systematically choosing the values of real or integer variables from within an allowed set.

Above two project selection methods are formal way of selecting projects, even if you have not seen them in your real life.