A sensitivity analysis graph:
A)provides the exact values of the range of probability for the optimal alternative.
B)is useful for a maximum of three alternatives.
C)is useful when the probabilities of payoffs are known.
D)provides a visual indication of the range of probability for the best alternative.
E)determines the average probability of a payoff.

Question

Quizplus · Accepted Answer

A sensitivity analysis graph provides a visual indication of the range of probability for the best alternative, making it easier to compare and make decisions. Options A, B, C, and E are incorrect because a sensitivity analysis graph does not necessarily provide exact values of probability range, has no limit on the number of alternatives it can be used for, does not require knowledge of the probabilities of payoffs, and does not provide information on average probability of a payoff.

A Sensitivity Analysis Graph