what-if analysis/sensitivity analysis
Instructions
looking in the two diagrams and writing for one paragraph each for what-if analysis and sensitity analysis
Answer
Innovation & Technology ManagementTwo decision tools, what-if analysis and sensitivity analysis are used in the innovations and technology management functional area.What-if Analysis What if analysis is a tool used to observe and track changes in the outputs by altering the input variables. Therefore, our innovation is related to reducing the variable costs. Hence, we use what-if analysis to understand changes of break-even point when the variable cost per unit changes. Before the innovation (cycle 7), the variable cost per unit for each brand is $0.9. By applying the what-if analysis, we could see that $0.1 increases for BR01-01 to BR01-08, and $0.05 for BR01-09 in the variable cost leads to a higher break-even point of 6.62 months, and a $0.1 decrease for BR01-01 to BR01-08, and $0.2...
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