“What-if” analysis

“What-if” analysis is the process of assessing the impact of changes made to model variables, the values of the variables, or the interrelationships among variables.


A Marketing manager might ask, “What would be the impact of a 12% increase in the cost of raw materials on future demand?”

Or A Bank manager might ask, “What would be the impact of an increase in interest rates on loan approvals?” and similar questions.

Thus the “what-if” analysis helps to assess the impacts of different scenarios on the bottom line.

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