Using and Evaluating Sensitivity Analysis for Business Advantage

The video tutorial explains sensitivity analysis, a tool businesses use to prepare for uncertainties and unexpected scenarios. It highlights how companies like Tesco use it to manage financial risks, particularly currency fluctuations. The tutorial discusses the benefits of being prepared for various scenarios and the challenges, such as increased complexity and data requirements. It emphasizes the importance of accurate data and the need for businesses to be flexible in addressing identified risks.

What is the primary purpose of sensitivity analysis in business?

How can sensitivity analysis help businesses prepare for economic uncertainties?

What are some potential risks that sensitivity analysis can help identify?

Explain the downside of using sensitivity analysis in forecasting.

What steps must businesses take after performing sensitivity analysis?

Discuss the importance of data accuracy in sensitivity analysis.

How can excessive data impact the effectiveness of sensitivity analysis?