Scenario Analysis Is Different Than Sensitivity Analysis

question 9

Multiple Choice

Scenario analysis is different than sensitivity analysis:

• A)as no economic forecasts are changed.
• B)as several variables are changed together.
• C)because scenario analysis deals with actual data versus sensitivity analysis which deals with a forecast.
• D)because it is short and simple.
• E)because it is a "by the seat of the pants" technique.

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Definitions:

Unutilized Assets

Resources or assets owned by a company that are not being used to their full potential, often resulting in inefficiency and lost revenue.

Overbooking

The practice of selling or booking more of a service than what is actually available, under the assumption that there will be cancellations or no-shows.

Lost Revenue

Revenue that was not earned due to missed opportunities, such as not having enough inventory to meet demand.

Differential Pricing

The strategy of selling the same product to different customers at different prices based on market factors, demand, and customer’s willingness to pay.