Sensitivity analysis is a tool used in risky analysis to determine the effects of changes in uncertain variables on the overall outcome of a project or decision. It involves testing different scenarios and assumptions to determine the impact they have on the outcomes of a decision or project.
In a risky analysis, sensitivity analysis is used to determine the risk exposure of a project or decision by measuring its sensitivity to different risk factors. By analyzing the sensitivity of a project or decision, decision-makers can identify the most critical factors that impact the success or failure of the project. This information can then be used to formulate risk management strategies that mitigate the impact of these factors.
Sensitivity analysis is particularly useful in decision-making processes that involve high levels of uncertainty and risks. Used correctly, it can help decision-makers make more informed and more confident decisions by providing greater insight into the potential consequences of different courses of action.
Sensitivity analysis in risky analysis
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