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Sensitivty

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Spreadsheet Sensitivity Analysis

Introduction
Spreadsheets and the Case Projects

The Dynamic Strategic Planning workbook is accompanied by a number of spreadsheet-based tools for data analysis. We have supplied these tools so that the users of this workbook can concentrate upon the use and implementation of decision analysis and strategic planning, rather than focusing upon the mechanics of the mathematics underlying their use. The current form of the spreadsheets is a consequence of a combination of factors: academic research, pedagogical design, and in-class experiences. Based upon new developments, they are being routinely improved. However, no amount of care in tool design can substitute for expertise on the part of the user. The case projects have been designed assuming that these tools will be used effectively. The purpose of this document is to assure that you, the user of these tools, are prepared to exploit them to their fullest - specifically, that you are able to make use of spreadsheet sensitivity analysis tools.
Spreadsheet Basics

Electronic spreadsheets (as opposed to the paper kind!) have revolutionized business analysis. This should be no surprise, given that one of the developers of the original tool, Visicalc, was a Harvard Business School dropout who recognized that a computer-based tool to facilitate business analysis would have made his life a little simpler at the HBS, and might even help managers when they got out into the real world. However, it took the happy historical coincidence of the personal computer, and the concomitant dispersion of computer power to every modern manager's desk, to assure the success of the concept. Conceptually, the spreadsheet is simply a representation of the original accountant's paper spreadsheet, composed of finely lined pages of labeled columns of numbers. The original concept was to provide the user

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