Sensitivity Analysis - Microsoft Excel

Example of how to build a sensitivity analysis table in Excel to evaluate how changing two inputs simultaneously will affect an output (profit). This is one of the functions on the "What-If-Analysis" section of Excel.

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Sensitivity analysis in Excel is one of the skills that separates the common Excel user from the power user.

Often we try to analyze business problems my thinking about what will happen if certain things change. For instance, what happens if we change the price? Well, the revenue would go up if we just changed price for a business, but total customers stayed the same.

However, the reality is that in reality, you never have scenarios where one variable changes, but everything else stays the same. There are always repercussions. When you raise the price, usually some customers will stop buying, but some will continue.

So when trying to analyze situations, it is better to try to build models and analyses that reflect many different variables changing at the same time.

This is where sensitivity analysis comes in. Using this Excel feature, we are able to examine how multiple changing variables will affect different business metrics. To do this, we can build a "sensitivity data table" to examine the range of possible outcomes.

In this tutorial, we learn how to build a sensitivity analysis table in Excel 2016 to evaluate how changing two inputs simultaneously will affect an output (profit).

#sensitivityanalysis #excel

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Видео Sensitivity Analysis - Microsoft Excel канала Eric Andrews