Scenario planning
Scenario planning explores plausible alternative future conditions and their implications for decisions. Scenarios are internally coherent possibilities built around important uncertainties, rather than one forecast with an automatic probability attached. Comparing responses across scenarios can reveal vulnerabilities, robust actions, options and signals to monitor. The purpose is better preparedness and judgement, not claiming to predict every future event.
Worked example
A transport business considers scenarios combining different fuel costs and travel demand. It tests fleet and financing choices under each and identifies commitments that are difficult to reverse.
Common mistake
Do not equate a scenario with a prediction or confuse several changes moving together with sensitivity analysis that varies one input while holding others fixed.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBL | Direct | September 2026–June 2027 |