The EzyEducation website uses cookies to help ensure we give you the best experience.
If you continue without changing your settings, we assume that you are happy to receive all cookies on the EzyEducation website.
Please refer to our Privacy and Cookies Statement to

find out more.

Continue

Business Studies Year 13 revision Day 23 - Sensitivity Analysis

Business Studies Year 13 revision Day 23 - Sensitivity Analysis

On day 23 of the Year 13 Recap we review the concept of sensitivity analysis and explain why it is important for all businesses to prepare for the uncertainty in business outcomes.

When a business makes forecasts about their expected performance in the marketplace, they need to make key assumptions regarding the key market variables such as the expected quantity sold, the expected costs of production and other factors relating to market dynamics.

However, these assumptions will not always hold in the real world due to factors outside of the business’s control. This means when making forecasts it is sensible to predict a range of outcomes rather than simply applying static assumptions to one forecast. By questioning the reliability of variable assumptions, the business can be more confident they are prepared for the outcome that prevails in the market.

Here Jacob guides you through the revision slide on sensitivity analysis:

 

Business Studies Year 13 revision Day 24 - Liquidi...
Economics Year 13 revision Day 23 - Globalisation
 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Sunday, 24 March 2019
Forgot your password?