Sensitivity analysis is a method used in project management to figure out how the results of a project will change if assumptions or variables change. It involves trying out different scenarios and changing the project’s parameters to find the most important things that affect the project and figure out how they might affect the project’s results.
Sensitivity analysis is especially helpful when there are a lot of unknowns or risks in a project or when there are a lot of things that could change how the project turns out. By finding the most important variables and figuring out how they might affect the project, project managers can make better decisions and come up with plans to reduce risks and uncertainties.
Different methods can be used to do a sensitivity analysis, such as scenario analysis, which looks at the effects of changing just one variable, or simulation modeling, which can test the effects of changing more than one variable at the same time. The results of sensitivity analysis can be used to improve project plans, make more accurate estimates of project costs and schedules, and find possible risks and uncertainties that could affect project results.
Overall, sensitivity analysis is a powerful tool for assessing project risks and uncertainties and making better decisions based on a full understanding of how different project variables might affect the project.
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Usage
Used in Risk Management
