What is meant by What-if analyses?
The term "what-if analysis" refers to the analysis of hypothetical scenarios to evaluate the potential impacts of various decisions or events on a company. By playing out "what-if" scenarios, companies can be better prepared for future challenges and make informed decisions.
Typical software functions in the area of "what-if analysis":
- Scenario Creation: Creation and management of various hypothetical scenarios based on different assumptions.
- Data Modeling: Using data models to simulate the impacts of changes in variables such as revenue, costs, or market conditions.
- Outcome Comparison: Comparing the results of different scenarios to identify the optimal decision paths.
- Risk Assessment: Analyzing the potential risks and opportunities associated with each scenario.
- Visualization: Displaying scenario results in charts and graphs for better understanding.
- Reporting: Automated generation of reports that summarize the outcomes and insights from the what-if analyses.
- Integration Capability: Ability to integrate data from various systems to conduct comprehensive analyses.
- Real-time Analysis: Conducting analyses in real-time to quickly respond to changing conditions.
Examples of "what-if analysis":
- Sales Forecast: Analyzing the impacts of different market conditions on sales figures.
- Budget Planning: Evaluating how changes in the budget would affect the financial situation of the company.
- Price Changes: Investigating the impacts of price changes on revenue and profitability.
- Cost Reduction: Simulating the savings from various cost-cutting measures.
- Market Entry: Assessing the potential impacts of entering a new market.
- Supply Chain Disruption: Analyzing the effects of supply chain disruptions on production and revenue.
