Compare and contrast scenario analysis and sensitivity analysis. Provide an example to help explain your response.|My homework helper

Posted: March 9th, 2023

Compare and contrast scenario analysis and sensitivity analysis. Provide an example to help explain your response.

SOLUTION

Scenario analysis involves evaluating different possible scenarios and their outcomes, based on a variety of assumptions and inputs. In scenario analysis, a set of possible future events or conditions are created and their impacts on the outcomes of a decision are analyzed. The purpose of scenario analysis is to provide decision-makers with a range of potential outcomes under different circumstances. Scenario analysis often involves creating best-case, worst-case, and most likely scenarios to help evaluate the potential risks and rewards of a particular decision.