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The Five Categories of Spreadsheet Analysys

  • Date Submitted: 05/30/2011 08:22 AM
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THE FIVE CATEGORIES OF SPREADSHEET ANALYSIS

BASE-CASE ANALYSIS

The base case analysis is the outcome of being measured to comparison or to even a base case.   This is normally drawn from policies that are already in place and even when there are uncertainties in the decision.   “The most scenarios likely would be the worst case or the best case might be a good choice.”
Therefore, if analysis is started a year ago than the base case would be to use the year ago base case proposal plan toward this year.   During this phase of the analysis base case scenarios have been used.   However, base case decisions are helpful in presenting results and setting the stage to the decision makers.  



THE WHAT-IF ANALYSIS
The What-if analysis is the process of changing the values in cells to see how these changes will affect the outcome of formulas on the worksheet.
What-if analysis also gives more than one way to inputs and how the way it changes the output.   When a base case has been identified, the next step would determine how the outputs would be changing base on the change of input parameters or variables.   In a parameter asking what change would or could happen if this does it or does not do so the parameters would represent the assumptions or forecast for decision making.
If the assumption or forecast differs than the results would be different.   However, the “what-if analysis measures that difference and helps us to appreciate the potential importance of each numerical assumption. “   If an improvement is located it can determine the decision variable of the improvement that would have the largest value made and by what value, and this can lead to better decisions.
“It is important not to underestimate the power of this first step in analysis. Simple what-if exploration is one of the most effective ways to develop a deeper understanding of the model and the system it represents.   It is also a part of the debugging process and it reveals the unexpected...

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