Chapter 11: Step 8: Conduct Sensitivity Analysis

As a best practice, a sensitivity analysis should be included in all cost estimates because it examines the effects of changing cost estimate inputs, or parameters, and underlying assumptions. Sensitivity analysis involves recalculating the cost estimate with different quantitative values for selected inputs to compare the results with the original estimate. If a small change in the value of a factor yields a large change in the overall cost estimate, the results are considered sensitive to that factor.