Guide on Sensitivity Analysis

Sensitivity Analysis is a significant approach used in Project Risk Analysis as outlined in the PMBOK Guide Seventh Edition.

Why Sensitivity Analysis is Important?
It is mainly used to predict the outcome of a decision if a situation turns out to be different compared to the key predictions or assumptions. It also helps in identifying risks and mitigating them proactively.

What is Sensitivity Analysis?
Sensitivity Analysis is a technique used to understand how various sources of uncertainty in a mathematical model contribute to the model's overall uncertainty. It helps to determine which variable, if changed, can have the most significant impact on the project outcome.

How Sensitivity Analysis Works?
It works by adjusting the variables one by one and observing the change in the output. The variable that causes the most significant change in the output is considered the most sensitive.

How to Answer Questions on Sensitivity Analysis in an Exam?
1. Understand the basic concept and procedure of Sensitivity Analysis.
2. Know how it contributes to Risk Management by identifying the most sensitive variables.
3. Understand its application in real-world project scenarios.

Exam Tips: Answering Questions on Sensitivity Analysis
For successful answers in exams, remember that Sensitivity Analysis is about identifying 'which variable will have the most potential impact on the project'. Link it with risk potentials and uncertainty. Practice identifying the most sensitive variables in different scenarios.