Response to ‘a new method of scenario analysis for strategic planning’

✍ Scribed by Jutta Bkauers; Martin Weber

• Publisher: John Wiley and Sons
• Year: 1989
• Tongue: English
• Weight: 100 KB
• Volume: 8
• Category: Article
• ISSN: 0277-6693
• DOI: 10.1002/for.3980080209

✦ Synopsis

example provided, with only seven variables, required a linear program with 549 constraints and 360 total variables. This may be acceptable if one is interested in producing one set of scenario forecasts about the future, but might become burdensome if one wished to perform numerous sensitivity analyses in an effort to optimize a conipany's own performance in the future. And in Battelle's experience, the purpose of any model, including scenario models, is not to produce a single-point forecast, but to obtain an understanding of how strategies implemented today can favourably affect a company's future in the marketplace. The ultimate value of scenarios to managers is not the abstract accuracy of a forecast but rather the optimization of many trade-offs under varying plausible circumstances.