Prescriptive Analytics: Optimization and Simulation - Multiple Goals, Sensitivity Analysis, What-If Analysis, and Goal Seeking
3 important questions on Prescriptive Analytics: Optimization and Simulation - Multiple Goals, Sensitivity Analysis, What-If Analysis, and Goal Seeking
List the reasons for performing sensitivity analysis
- To assess the impact of a change in the input data or parameters on the proposed solution. (i.e. the result variable)
- Allows flexibility and adaptation to changing conditions and requirements
- Provides better understanding of the model and the decision making situation
- Permits the manager to input data to increase the confidence in the model
Explain why a manager might perform what-if analysis
To know what will happen to the solution if an input variable, an assumption, or a parameter is changed.
Explain why a manager might use goal seeking
Goals seeking is a backward solution approach and it calculates the values of the input variables to achieve a desired level of output (goal).
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