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Best Possible Scenario Analysis

Scenario analysis: “Scenario analysis is a comprehensive, systematic, and strategic planning tool that assists decision-makers in understanding the potential consequences of various future events or situations.

It involves the creation of multiple plausible scenarios based on key variables, uncertainties, and trends that may affect an organization or system over time.

By analyzing these different scenarios, stakeholders can gain insights into potential risks, opportunities, and implications, thereby enabling them to make more informed decision. Finance Strategist.com

Frequently, there are three scenarios being examined:

  • Base case: most likely
  • Best case
  • Worst case

S&OIS is particularly powerful scenario analysis technique because the solution for what the scenario is analyzing (e.g., profit) is the best possible solution

 

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