Mork Pharmaceuticals believes that changes in health insurance may increase demand by as much as 10%, but also lower prices by as much as 10%. It is also concerned that the cost of materials may increase as much as 10% and the company may or may not be able to pass these higher costs on to its customers. To estimate expected, best case and worst case results, Mork should use

Question

Quizplus · Accepted Answer

Scenario analysis is the best choice in this case as it allows Mork Pharmaceuticals to estimate expected, best case, and worst case results by considering a combination of multiple variables and assumptions. Sensitivity analysis may not be sufficient in this case as it only considers the impact of one variable at a time. Political risk analysis is not relevant in this scenario, and probability analysis may not be appropriate if the assumptions cannot be easily quantified.

Mork Pharmaceuticals Believes That Changes in Health Insurance May Increase