Sensitivity Analysis A systematic way of asking “what-if” scenario questions in order to understand what outcomes could possibly occur that would effect your decision which input assumptions will have the most impact on your decision and should be analyzed further Performed by setting all inputs equal to their base values and changing one variable’s assumed value at a time

Spreadsheet Data Tables Data Table 1 allows you to change one input variable’s value at a time and record the impact that the input assumption has on selected key decision-making outputs. Data Table 2 allows you to change two input variable values simultaneously and record the impact that the input assumptions have on one key decision- making output.

Setting Up a Data Table 1 Structure Start the table on the worksheet where the input variable cell is shown. The first column of the table should hold possible values for the input variable being considered. The first cell in this column should be left blank or filled with an identifying label for documentation purposes only. The first row of the table should contain formulas that refer to the key output variables for which you would like to record observed values (starting in the second column). The table that is defined by the first column and first row is an array that will be filled in with observed values for the output variable identified by the column heading when the assumption in the corresponding row is entered into the spreadsheet input cell.

Calculating the Data Table Values Highlight the entire data table array Select the DATA menu and TABLE option. Fill in the Table dialog box by entering the cell address for the input variable location into the Column Input Cell box. Click OK. Excel will systematically place one value from the first column into the address you specified in the Table dialog box. It will then record the observed values for the output variable cell identified in row 1 into the corresponding row and column. It will repeat this until all values in column 1 have been tested.

Modifying the Data Table Array After performing the Data Table menu option, a Table function will be visible inside each cell of the the data table. This is an array function that may not be directly edited or partially removed. To remove the results and formulas, you must select the entire array and press delete. The Table functions in the cells make the table dynamic to new possible input values that you may want to test. You may change the numbers in the first column and the table will automatically update with the new observed results.

Input Variable Values Worst Case –vs- Most Likely Case –vs- Best Case scenarios 10%, 20%, 30% above and below the expected value Do not put formulas in column 1 that refer directly or indirectly to the input variable cell that you will enter in the Table dialog box. This will create a circular reference and give you garbage in your table results (without showing an error message!)

Spider Diagrams Line graphs which allow you to visually compare how different input variables impact a key output variable. The lines with the steepest slopes can be identified as the input assumptions which are most likely to impact the final decision. You should examine the range over which the input assumptions were tested to validate the appropriateness of the lines shown.