Sensitivity

Analysis Sensitivity Analysis is a tool used to identify how much a change in a parameter affects a model's outcome. It is a type of risk analysis wherein changes in the value of independent variables are analysed to determine the effect on a dependent variable. The independent variables can be factors such as cost, demand, and supply that may impact the outcome of a model. Sensitivity Analysis allows decision makers to identify areas where changes may have a strong influence on the outcome of the model. This knowledge can help decision makers identify opportunities to reduce cost, increase demand, or increase supply, which can ultimately lead to a more successful model. Sensitivity Analysis is also used to identify model weaknesses, which can be addressed in future models.