what is scenarios analysis class 10th explain it in simple definition and also some example....for explaining....
....thanku...
Answers
Scenario analysis is a powerful process for navigating the uncertainty of the future by analyzing the potential business impacts of future events and considering alternative possible outcomes.
Scenario analysis is the process of estimating the expected value of a portfolio after a given change in the values of key factors take place. Both likely scenarios and unlikely worst-case events can be tested in this fashion—often relying on computer simulations.
Scenario Analysis: This scenario analysis shows how changes in factors like yield and transport cost can affect profits. For example, a firm might use scenario analysis to determine the net present value (NPV) of a potential investment under high and low inflation scenarios.
The definition of a scenario is a series of events that is projected to occur. When you run through all of the possible outcomes of a conversation in your head, this is an example of a situation where you run through all possible scenarios.
Scenario analysis allows organizations to analyze and quantify potential business impacts of such events, so they can plan accordingly. It can also be used to assess the benefit and risks of different business decisions, such as the potential impact on revenue and profitability of building new facilities.
Scenario Analysis can help you to make better decisions, or to plan your business strategy, by challenging your assumptions about the future. Exploring a range of alternative scenarios allows you to identify potential risks and plan how you will counteract or mitigate their impact.
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