sensitivity analysis


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Sensitivity analysis

Analysis of the effect on a project'sprofitability of changes in sales, cost, and so on.

Sensitivity Analysis

The analysis of an investment's profitability according to various changes. That is, sensitivity analysis considers potential changes to interest rates, costs, and/or other variables and measures how this will affect the return on the investment. Sensitivity analysis is a form of quantitative research. It can be useful in making investment decisions. It is sometimes called a what-if analysis. See also: Volatility.

sensitivity analysis

a means of testing the extent to which the results of an analysis of an INVESTMENT project or company budget would change if one or more of the assumptions on which the analysis is based were to change. For example, in estimating the rate of return on an investment, such as a new machine, a firm will need to input various assumptions about the cost of the machine, the anticipated life of the machine, its running costs, annual output, residual value etc. Sensitivity analysis shows how much the expected rate of return on the machine would change if any one of these factors were to be higher or lower than originally expected. Sensitivity analysis thus allows managers to anticipate a range of possible outcomes where uncertainty about the factors involved make it impossible to predict the exact outcome. See UNCERTAINTY AND RISK, DISCOUNTED CASH FLOW.

sensitivity analysis

Use of spreadsheets to analyze an income-producing property or a development project, and then changing key assumptions in order to view the changes this causes. The creation of a best-case,worst-case,and most-likely-case pro forma is one type of sensitivity analysis.

References in periodicals archive ?
In the first sensitivity analysis ("Sensitivity Analysis 1"), we included second-born children from these sibling pairs.
Spreadsheets demonstrate how to model queuing theory, scenario and sensitivity analysis, ratios, leasing variables, the break-even threshold, crime data, and resource allocation.
Loss to follow-up was established using a sensitivity analysis, which assumed that varying proportions of the population lost to follow-up had died
Based on our sensitivity analysis, a small 10bps increase in NIM's from our estimates will impact our 2013E and 2014E net income estimate for the ten banks by 4.
Sensitivity analysis was conducted to assess the robustness of the pooled estimator.
Huang: Sensitivity analysis for strongly nonlinear quasi variational inclusions, Appl.
Sobol decomposition was applied as a method for global sensitivity analysis (Saltelli et al.
2012) regarding "higher-functioning" ASD include three null associations and one association in the smallest subgroup of 375 cases (ASD-not otherwise specified; ASD-NOS) that was "statistically significant" only in sensitivity analysis.
The sensitivity analysis was used to compare sensitivity of LQ controllers.
3 Junin 5, Venezuela, Remaining PV Sensitivity Analysis 15
They are Markov reliability and availability analysis, Monte Carlo simulations, Markov Chain Monte Carlo analysis, the basics of genetic algorithms, dependent failures, importance measures, and basic concepts of uncertainty and sensitivity analysis.
The paper is the extended abstract of dissertation which is concerned with the estimation of reliability for the individual predictions of regression models (in contrast to estimating the accuracy of the whole model) and with the use of sensitivity analysis in that area.