Principle
The analysis is designed to allow improved decision-making by allowing consideration of outcomes and their implications.
Scenario analysis can also be used to illuminate "wild cards." For example, analysis of the possibility of the earth being struck by a large celestial object (a meteor) suggests that whilst the probability is low, the damage inflicted is so high that the event is much more important (threatening) than the low probability (in any one year) alone would suggest. However, this possibility is usually disregarded by organizations using scenario analysis to develop a strategic plan since it has such overarching repercussions.
Read more about this topic: Scenario Analysis
Famous quotes containing the word principle:
“A state of war or anarchy, in which law has little force, is so far valuable, that it puts every man on trial. The man of principle is known as such, and even in the fury of faction is respected.”
—Ralph Waldo Emerson (1803–1882)
“I often wish for the end of the wretched remnant of my life; and that wish is a rational one; but then the innate principle of self-preservation, wisely implanted in our natures, for obvious purposes, opposes that wish, and makes us endeavour to spin out our thread as long as we can, however decayed and rotten it may be.”
—Philip Dormer Stanhope, 4th Earl Chesterfield (1694–1773)
“I sincerely believe ... that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”
—Thomas Jefferson (1743–1826)