Sensitivity Analysis Helps You Determine The

question 9

Multiple Choice

Sensitivity analysis helps you determine the:

• A) range of possible outcomes given possible ranges for every variable.
• B) degree to which the net present value reacts to changes in a single variable.
• C) net present value given the best and the worst possible situations.
• D) degree to which a project is reliant upon the fixed costs.

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Definitions:

Population Percent Defective

The percentage of items in a given population that do not meet the specified quality criteria, used as a measure of process quality.

OC Curve

The Operating Characteristic Curve, used in statistical quality control, representing the probability of accepting lots as a function of their defect level.

Acceptance Sampling

A statistical quality control method where a random sample of items is inspected to decide if the whole batch meets the prescribed standards.

AOQ

Average Order Quantity; the mean volume of goods ordered over a specific period of time, reflecting purchasing behavior.