Sensitivity analysis

Sensitivity analysis
See also
Behavioral aspects of decision-making Business plan Impact of information on decision-making Decision making Linear programming Scenarios of processes in environment Decision table Strategic foresight Strategic controlling

Sensitivity analysis is one of the stages of decision making. Allows you to assess how would change the choice of an optimal decision, if you have changed the basic economic size or operating conditions. Sensitivity analysis is useful, because:

1. allows to highlight the main characteristics of the problem having an impact on the decision,
2. allows to assess the impact of the various factors, on management goals,
3. allows to reach optimal solutions in the case of a decision repeated in slightly modified conditions.

Sensitivity analysis can also include an evaluation of the implementation of the selected variant of decision. Using this technique, managers can be reassured that they made correct decision. And if not, what were the reasons? If the decision-making context has been correctly recognized? If there was set a proper goal? If they have considered all variants? If in the light of the ex-post evaluation managers would change their original decision?

References

• William F. Samuelson, Stephen G. Marks; "Ekonomia menedżerska" Polskie Wydawnictwo Ekonomiczne 1998r.
• Saltelli, A., Chan, K., & Scott, E. M. (Eds.). (2000). Sensitivity analysis (Vol. 1). New York: Wiley.