What-If Analysis

Published: | Updated: July 23, 2017;

Definition - What does What-If Analysis mean?

A what-if analysis is a technique that is used to determine how projected performance is affected by changes in the assumptions that projections are based upon. What-if analysis is used to compare different scenarios and their potential outcomes based on fluctuating conditions.

The purpose of a what-if analysis is to determine the effect of these outcomes in a statistical model in conjunction with risk assessment. Different methods of sensitivity analysis are available, including scenario-management tools, brainstorming techniques, and modeling and simulation techniques. What-if analysis is frequently used by researchers, analysts, scientists, and investors.

It is also known as sensitivity analysis.

Safeopedia explains What-If Analysis

What-if analysis is the study of how the uncertainty in the output of a model or system (numerical or otherwise) can be linked to different sources of uncertainty in its inputs. Its main purpose is to test the robustness of the results of a model or system in the presence of uncertainty to better understand the relationships between input and output variables in a system or model.

What-if analysis searches for errors in the model through unexpected relationships between inputs and outputs. It is used for model simplification to fix model inputs that have no effect on the output, as well as to identify and remove redundant parts of the model structure.

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