CHAPTER 5 OUTPUT INTERPRETATION and SENS|TⅣ ITY ANALYS|S Judging if the answers are sensible cR( Model mis-specification cR(i) data entry errors cR(in) keystroke errors
CHAPTER 5 OUTPUT INTERPRETATION and SENSITIVITY ANALYSIS Judging if the answers are 'sensible' (i) Model mis-specification, (ii) data entry errors (iii) keystroke errors
SENSITIVITY ANALYSIS: Modelling change o Three crucial inputs into the break-even model the selling price per unit(p) the fixed costs(FC) the variable cost per unit (VC) cR The selling price changes from 20 to 40 What data columns in out table of information will be affected, and how will they be affected? What lines on our graphical representation will be affected, and how will they be affected How will the matrix representation of our problem be affected What will happen to the break-Even level of output?
SENSITIVITY ANALYSIS : Modelling Change Three crucial inputs into the break-even model: the selling price per unit (p). the fixed costs (FC). the variable cost per unit (VC). The selling price changes from 20 to 40 What data columns in out table of information will be affected , and how will they be affected ? What lines on our graphical representation will be affected , and how will they be affected ? How will the matrix representation of our problem be affected ? What will happen to the Break-Even level of output?
QUALITATIVE PREDICTION MODEL INPUTS Price per Fixed Variable Unit Costs I Cost/Unit I Change Up I Down Up I Down I Up I Down I Line I Affected TR TC TC i Parameter I Affected PE SLOP INTERCEPT SLOPE I Type of I Movement PIVOTAL PARALLEL PIVOTAL I Direction Up I Down Up dOwn Up I Down I l of Movement ||----I Impact on Break-Even I Down Up Up I Down Up down I I quantity
QUALITATIVE PREDICTION
Quantitative Prediction CRWHAT Will happen IF the selling price per unit rises to 25 The TR information will change The TC information will stay the same The Profit information will change The A-matrix will change The a"b matrix will change The answer will change
Quantitative Prediction WHAT will happen IF the selling price per unit rises to 25 The TR information will change. The TC information will stay the same. The PROFIT information will change. The A-matrix will change. The A''b matrix will change. The answer will change
The Conceptual Paper Worksheet CPW cwe would like to structure our worksheet such that any change in the inputs will have an immediate impact on all the cells in the worksheet that depend upon these inputs aRwe would like the worksheet to be constructed such that it is automatically updated to reflect any change in the input values
The Conceptual Paper Worksheet ( CPW) we would like to structure our worksheet such that any change in the inputs will have an immediate impact on all the cells in the worksheet that depend upon these inputs. we would like the worksheet to be constructed such that it is automatically updated to reflect any change in the input values
