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Institute for Manufacturing |
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Decision support tools References
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Sensitivity Analysis
Sensitivity analysis is useful in consideration of the consequences of using faulty data in, say, forecasting costs/cash flows. It involves speculation on alternative scenarios and estimating the accuracy of data, e.g. Optimistic estimate - Pessimistic estimate - most likely estimate. The graph shown above is used in sensitivity analysis. Steeper curves indicate a higher degree of sensitivity to deviations from the original estimates. |
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This page is from the Institute for Manufacturing, Department of Engineering, University of Cambridge
www.ifm.eng.cam.ac.uk
