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6.6 Sensitivity Analysis, What-If Analysis, and Goal-Seeking

Sensitivity analysis assesses the impact of changes to input data or parameters on solutions. It allows flexibility for changing conditions and tests relationships between variables. There are two main types of sensitivity analysis - automatic, performed through standard quantitative models, and trial-and-error, where variables are manually changed. What-if analysis examines how solutions would change if inputs like assumptions or values were altered. Goal-seeking calculates input values needed to achieve desired output goals.

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Yahel Rodriguez Manssur
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28 views5 pages

6.6 Sensitivity Analysis, What-If Analysis, and Goal-Seeking

Sensitivity analysis assesses the impact of changes to input data or parameters on solutions. It allows flexibility for changing conditions and tests relationships between variables. There are two main types of sensitivity analysis - automatic, performed through standard quantitative models, and trial-and-error, where variables are manually changed. What-if analysis examines how solutions would change if inputs like assumptions or values were altered. Goal-seeking calculates input values needed to achieve desired output goals.

Uploaded by

Yahel Rodriguez Manssur
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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6.

6 SENSITIVITY ANALYSIS,
WHAT-IF ANALYSIS, AND
GOAL-SEEKING
Sensitivity Analysis

It attempts to assess the impact of a change in the input data or


parameters on the proposed solution. It allows flexibility to changing
conditions, and tests the following relationships:
■ The impact of changes in external variables and parameters on the
outcome variables
■ The impact of changes in decision variables on the outcome variables
■ The effect of uncertainty in estimating external variables
■ The effects of different dependent interactions among variables
■ The robustness of decisions under changing conditions
Types of Sensitivity Analysis

Automatic Trial-and-Error
It is performed in standard The impact of changes in any
quantitative model variable, or in several variables,
implementations. For example, can be determined through a
it reports the range within which simple trial-and-error approach.
a certain input variable or You change some input data and
parameter value can vary solve the problem again.
without having any significant
impact on the proposed solution.
What-If-Analysis

What will happen to the solution if an input variable, an


assumption, or a parameter value is changed?
For example:
■ What will happen to the total inventory cost if the cost of carrying
inventories increases by 10 percent?
■ What will be the market share if the advertising budget increases by 5
percent?
Goal Seeking

It calculates the values of the inputs necessary to achieve a desired level


of an output (goal). It represents a backward solutions approach.

Example:
■ What annual R&D budget is needed for an annual growth rate of 15
percent by 2018?
■ How many nurses are needed to reduce the average waiting time of a
patient in the emergency room to less than 10 minutes?

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