Scenario analysis

Last updated: 21.03.2016

Scenario analysis is a prediction method under which several possible outcomes (variants) are worked out. It is often used during budgeting process and decision-making, mainly as a method of reducing uncertainty.

The most common scenarios are:

  • optimistic (best-case scenario)
  • realistic – i.e. the most likely outcome; in budgeting, this scenario is often used as the main budget (target)
  • pessimistic (worst-case scenario)


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