The more your business experiences supply side volatility, demand uncertainty, or both, the more you need to understand their impact and the ability to respond.
For that, scenario analysis is a must. Our experience has shown that scenario analysis is a useful tool for Senior Management if it is simple to understand and the analysis is actionable.
It helps to understand the potential impact of a change in business, as well as the best way to mitigate/leverage it.
To get the most from scenario analysis, we should concentrate on gaining insights within the context of operational constraints and realities, not on evaluating operational details.
We use this process to estimate the expected value of a portfolio.
It is one of the most important forms of projections and through this we try to predict the future of our company.
In this problem several scenarios are flushed out regarding which way the company will lead and from all those options the best one to progress our company forward is selected and acted upon.