What does the term 'sensitivity analysis' refer to?
A)The process of analysing the effects of a range of possible future outcomes
B)The process of analysing the effects of the most likely future outcomes
C)The process of modelling the effects of the most likely future outcomes
D)The process of modelling the effects of a range of possible future outcomes

Question

Quizplus · Accepted Answer

Sensitivity analysis refers to the process of modelling the effects of a range of possible future outcomes. It helps in understanding how changes in different variables or assumptions can affect the overall outcome of a model or decision. A sensitivity analysis can be used to identify the key drivers of an outcome, assess the robustness of a decision, and evaluate the impact of uncertainty or risk on the outcome. Therefore, option D is the correct choice.

What Does the Term 'Sensitivity Analysis' Refer To