In the sensitivity analysis, you will of course identify production volume and costs as quite sensitive parameters. Then you visit marketing and production teams (same case as “productivity”) to validate the hypothesis and make your recommendation. Did you forget someone on your visit list?

This video will give you the solution to the exercise accompanying step 6 as well as some important additional information.

Once you have viewed it you can move on to the next step on the real options.

Click to download the accompanying solution worksheet.