Sensitivity Analysis Is Important in Management Support Systems for All

question 28

Multiple Choice

Sensitivity analysis is important in management support systems for all of the following reasons EXCEPT

• A) it allows flexibility and adaptation to changing conditions.
• B) it permits the manager to input data to increase his/her confidence in the model.
• C) it improves the mathematical optimality of the generated solutions.
• D) it provides a better understanding of the model and the decision-making situation.

---

Definitions:

Accounting Period

The time span during which financial activities are recorded and reported, commonly a fiscal year or quarter.

Expense Accounts

Accounting categories used to track money spent or costs incurred in a company’s operations.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate revenue and expenses to the proper period.