Sensitivity analysis allows investigation of the effect of altering supply capacities,demand levels,and costs on a "what if" basis.

Question

Quizplus · Accepted Answer

Sensitivity analysis is a tool that allows examining the impact of changes or variations in different factors, such as supply, demand, cost, etc. on the performance of a system or a decision. It helps decision-makers to explore different scenarios and assess the possible outcomes under different conditions. By altering supply capacities, demand levels, and costs, sensitivity analysis can provide insights into the sensitivity of the system or decision to these factors and help identify critical points or risks. Therefore, the statement that sensitivity analysis allows investigation of the effect of altering supply capacities, demand levels, and costs on a "what if" basis is true.

Sensitivity Analysis Allows Investigation of the Effect of Altering Supply