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Sensitivity Analysis of Optimal Cost With Various Parameters

1. This document analyzes the sensitivity of optimal cost based on variations in three parameters: the probability of Focus winning, the probability of Focus winning given a prediction of Focus winning, and the probability of Forward winning given a suit by Focus. 2. It shows the low, base, and high values considered for each parameter, and how the optimal cost output varies between -8.3 to -0.56 as the parameters are changed. 3. The probability of Focus winning produces the greatest swing in optimal cost between extreme parameter values, resulting in a 65.8% swing square percentage, while the other two parameters produce smaller swings of 22.2% and 12%.

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Shubham Ranka
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25 views

Sensitivity Analysis of Optimal Cost With Various Parameters

1. This document analyzes the sensitivity of optimal cost based on variations in three parameters: the probability of Focus winning, the probability of Focus winning given a prediction of Focus winning, and the probability of Forward winning given a suit by Focus. 2. It shows the low, base, and high values considered for each parameter, and how the optimal cost output varies between -8.3 to -0.56 as the parameters are changed. 3. The probability of Focus winning produces the greatest swing in optimal cost between extreme parameter values, resulting in a 65.8% swing square percentage, while the other two parameters produce smaller swings of 22.2% and 12%.

Uploaded by

Shubham Ranka
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Sensitivity Analysis of optimal cost with various parameters

p(FW)

-8.3

-0.56

p(FsF/FW)

-4.75

P(FwW/FsF)

-4.5
-10

Input
Variable

-9

-8

-7

-6

-5

Corresponding Input Value


Low
Base
High
Output
Case
Output

p(FW)

0.95

0.4

0.05

p(FsF/FW)

0.95

0.9

0.05

P(FwW/Fs
F)

0.05

0.2

0.95

Input
Value
0.05
0.08
0.12
0.16
0.2
0.24
0.28
0.32
0.36
0.4
0.44
0.48
0.52
0.56
0.6
0.64
0.68
0.72
0.76
0.8
0.84

-0.25

% of Base
12.5%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
110.0%
120.0%
130.0%
140.0%
150.0%
160.0%
170.0%
180.0%
190.0%
200.0%
210.0%

Output
Value
-0.5625
-0.9
-1.35
-1.8
-2.25
-2.7
-3.15
-3.6
-4.05
-4.5
-4.95
-5.4
-5.85
-6.3
-6.75
-7.2
-7.65
-8.1
-8.3
-8.3
-8.3

-1.2
-4

-3

-2

-1

Output Value
Lo Bas
w
e High
0.56
8.3 4.5
25
4.7
5 4.5 -0.25
1.19
4.5 4.5
52

Swin
g

Percen
t
Swing
^2

7.73
75

65.8%

4.5

22.2%

3.30
48

12.0%

0.88
0.92
0.95

220.0%
230.0%
237.5%

-8.3
-8.3
-8.3

1. This analysis tells that probability of prediction of Focus winning to Discount is


most sensitive to the output cost incurred for the decision. Changing this
parameter from pessimistic to optimistic extreme will result in a change of $
7.7375 units of cost, with a maximum swing square percentage of 65.8.
2. Other parameters to which cost is sensitive to are: probability of Focus
winning given that the study predicts Focus winning to Discount and
probability of Forward winning given that the Focus sues Forward, with swing
percentage of 22.2 and 12.0 respectively.

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