Thursday, September 17, 2009

Sensitivity, what-if, and goal seeking analyses page 159

Sensitivity analysis
  • Assesses the impact of change in inputs or parameters on solutions
  • Allows for adaptability and flexibility
  • Eliminates or reduces variables
  • Can be automatic or trial and error
What-if analysis
  • Assesses solutions based on changes in variables or assumptions
Goal seeking analysis
  • Backwards approach, starts with goal
  • Determines values of inputs needed to achieve goal
  • E.g. break-even point determination

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