Why Perform Sensitivity Analysis? of What Use Is Sensitivity Analysis

question 41

Short Answer

Why perform sensitivity analysis? Of what use is sensitivity analysis where good probability estimates are difficult to obtain?

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Definitions:

Gallons

Gallons are a measure of volume used primarily in the United States, equivalent to 3.785 liters.

Labor Quantity Variance

The difference between the actual labor hours used in production and the standard hours expected, multiplied by the standard hourly labor rate.

Direct Labor

The cost of wages for employees who are directly involved in the production of goods or services.

Production Department

The division or area in a manufacturing facility where products are made or assembled.