Asked by Mackenzie Kiernan on Jun 12, 2024
Verified
Explain the benefits of utilizing sensitivity analysis and justify why those benefits are important to the decision making process.
Sensitivity Analysis
An approach to assess how different values of an independent variable affect a particular dependent variable under a given set of assumptions.
- Gain insight into the essentiality and procedural aspects of scenario and sensitivity analysis in the context of managing projects.
Verified Answer
HA
Hussein Al Hajj SleimanJun 18, 2024
Final Answer :
Sensitivity analysis identifies the variables that are most crucial to the success of a project. By having this information, management can concentrate their efforts on verifying the accuracy of the sensitive variables. By ensuring these estimates are reliable, management can reduce potential forecasting errors in the areas that could potentially create the largest financial problems.
Learning Objectives
- Gain insight into the essentiality and procedural aspects of scenario and sensitivity analysis in the context of managing projects.
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