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:
“The principle of majority rule is the mildest form in which the force of numbers can be exercised. It is a pacific substitute for civil war in which the opposing armies are counted and the victory is awarded to the larger before any blood is shed. Except in the sacred tests of democracy and in the incantations of the orators, we hardly take the trouble to pretend that the rule of the majority is not at bottom a rule of force.”
—Walter Lippmann (1889–1974)
“A certain secret jealousy of the British Minister is always lurking in the breast of every American Senator, if he is truly democratic; for democracy, rightly understood, is the government of the people, by the people, for the benefit of Senators, and there is always a danger that the British Minister may not understand this political principle as he should.”
—Henry Brooks Adams (1838–1918)
“It were as wise to cast a violet into a crucible that you might discover the formal principle of its colour and odour, as seek to transfuse from one language into another the creations of a poet. The plant must spring again from its seed, or it will bear no flower—and this is the burthen of the curse of Babel.”
—Percy Bysshe Shelley (1792–1822)