Sensitivity Study (or Scenarios) with Data Table

In managerial decision making, many time we need more than just an optimal decision. Often we would like to know how my results change if I change my decision in a certain way, or if one of the environmental parameters change.

In other words, we want to do what-if analysis.

In Excel this is made quite easy with Data Table. You just need to do the following:

– Write down your scenarios, in one column (or in a row);
– Tell Excel what results you would like to see for each of the proposed scenario;
– Tell Excel what variable is driving the scenarios. Excel will then plug each of your scenarios into the variable, and produce your desired results.

See a short illustration video here:

You can download the Excel file here.