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 selfish spirit of commerce, which knows no country, and feels no passion or principle but that of gain.”
—Thomas Jefferson (1743–1826)
“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)
“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)