Question

Assume that you have a company that assembles final products from a large variety of components that are supplied by factories located in various parts of the world. In the past you have experienced disruptions in the flow of your supply of components as the result of bad weather, such as a strong El Niño phenomenon, as well as other uncontrollable events. You have back-up suppliers, but each have different capacities and delivery schedules. So you created a model that includes sets of assumptions about changes in suppliers and delivery times in the event of unusual disruptive events. The Excel tool specifically designed for your use in this case is:________

Answer 1

Answer:

Sensitivity analysis

Explanation:

The excel tool that is fit for this task is a sensitivity analysis

Sensitivity analysis is a financial modelling tool that illustrates how a set of input variables impacts the dependent output variable under a certain specific condition , useful for making predictions concerning a range of variables.

It helps in identifying key variables that are of high influence on a project to facilitate a more precise forecasting , and also to help in ranking projects.

Other key benefits are that it considers the time value of money and cash flow.