Sensitivity Analysis

A systematic way of asking “what-if” scenario
questions in order to understand



what outcomes could possibly occur that would
effect your decision
which input assumptions have the most impact on
key outputs and thus your decision and should be
analyzed further
Performed by setting all inputs equal to their
base values and changing one variable’s
assumed value at a time
Spreadsheet Data Tables

Data Table 1 allows you to change one input
variable’s value at a time and record the
impact that the input assumption has on
several selected key decision-making outputs.

Data Table 2 allows you to change two input
variable values simultaneously and record the
impact that the input assumptions have on one
key decision-making output.
How to Set Up a Data Table 1 with
Column Input

Create the table on the same worksheet where the
input variable cell is shown.
 The first column of the table should hold possible
values for the input variable being considered. The
first cell in this column should be left blank or filled
with an identifying label for documentation.
 The first row of the table should contain linking
formulas to the key output variables for which you
would like to record observed values
 The table that is defined by the first column and first
row is an array that will be filled in with observed
values for the key output variables identified by the
column heading row.

See MyLMUConnect Excel Snippit: What is the purpose of the
One Variable Data Table?
Calculating the Data Table Values

Highlight the entire data table array

Go to the Data ribbon, Data Tool category, What-if
Analysis submenu and select Data Tables.

Fill in the Table dialog box by entering the cell address
for the input variable location into the Column Input
Cell box. Click OK.

Excel will systematically place one value from the first
column into the address you specified in the Table
dialog box. It will then record the observed values for
the output variables in the respective columns.

See the two MyLMUConnect Excel snippits: Using Excel’s Data
Table Menu Command
Modifying the Data Table Array

After calculating a Data Table, a Table
function will be visible inside each cell of the
data table. This is an array function that may
not be directly edited or partially removed. To
remove the results and formulas, you must
select the entire array and press delete.

The Table function in the array makes the
table dynamic to new possible input values
that you may want to test. If you change the
numbers in the first column or a base value
for another input in the model, the table will
automatically update with the new observed
results.
Input Variable Values
Worst Case –vs- Most Likely Case –vs- Best
Case scenarios
 10%, 20%, 30% above and below the
expected value
 Do not put formulas in column 1 that refer
directly or indirectly to the input variable cell
that you will enter in the Table dialog box.
This will create a circular reference and give
you garbage in your table results (without
showing an error message!)
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Tornado Charts

Shows how sensitive one output is to all inputs
in the model. This allows you to quickly identify
which parameters can have a major impact on
a key result.
 Can be easily created using RSPE. Highlight
the output cell and select the RSPE ribbon,
Parameters, Identify option.
 Input values are tested for a specified %
change option.
Spider Diagrams

Line graphs which allow you to visually
compare how different input variables impact a
key output variable.
 The lines with the steepest slopes can be
identified as the input assumptions which are
most likely to impact the final decision.
 You should examine the range over which the
input assumptions were tested to validate the
appropriateness of the lines shown.