Ch_7_Estimating_Cash_Flows_and_Gathering_Information

Good first pass wide bars indicate sensitivity

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Good first pass : wide bars indicate sensitivity. Sensitivity Analysis Tornado Diagram € 0 € 100 € 200 € 300 € 400 € 500 € 600 Base Case Salvage Value Investment Capacity Margin Input Presetn Worth (15%) Created using a stackbar graph. Requires low estimate of output ( P ) and the difference between the high and low estimate of the output parameter ( P ). The bar resulting from the low estimate is “erased” by drawing it without a border and clear color. 22 Spider Plot Spider Plot More detailed than a Tornado Plot in that it provides level of input and output errors. Steep slopes indicate sensitivity. Created using an X-Y graph with multiple data inputs. Requires error input and error output as percentages, allowing for multiple parameters to be displayed at once. Sensitivity Analysis Spider Plot -100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% -200% -150% -100% -50% 0% 50% 100% 150% Input Error Investment Per Unit Margin Capacity Salvage Value
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23 Sensitivity Output Sensitivity Output Analysis determines which output is most sensitive to errors -- which can change the decision Parameters in spider plot with steepest slope Parameters on top of the tornado plot Focus estimating efforts on these parameters, not those with little influence on the decision 24 Estimation Methods Simple Techniques Unit Method Indexing Power Law and Sizing Model Learning Curves Advanced Techniques Curve Fitting Statistical Forecasting
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