Lesson 2 of 3•AI for Executive Decision Making0 of 3 complete (0%)
Scenario Analysis & Decision Trees
10 min
What you will learn
- Build scenario analyses that model best-case, base-case, and worst-case outcomes
- Use AI to create decision trees with probability-weighted outcomes
- Apply sensitivity analysis to identify which assumptions matter most
- Present scenario analysis in a format that drives executive decisions
# Scenario Analysis & Decision Trees
Executives make decisions under uncertainty. Scenario analysis does not eliminate uncertainty — it structures it. Instead of asking "what will happen?" you ask "what could happen, how likely is each scenario, and what is our plan for each?"
Three-Scenario Framework
We are considering [strategic decision]. Build a scenario analysis:
BASE CASE (most likely — 50% probability):
- Key assumptions: [list what must be true]
- Expected outcome: [revenue, growth, market share]
- Timeline: [when do we see results]
BEST CASE (optimistic — 25% probability):
- What goes better than expected?
- Expected outcome with upside factors
- What catalysts could push us here?
WORST CASE (pessimistic — 25% probability):
- What goes wrong?
- Expected outcome with downside factors
- What early warning signs would signal we're in this scenario?Unlock this lesson
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What you'll learn:
- Build scenario analyses that model best-case, base-case, and worst-case outcomes
- Use AI to create decision trees with probability-weighted outcomes
- Apply sensitivity analysis to identify which assumptions matter most