Correct Answer: B
Explanation/Reference:
Explanation:
11.4.2.2 Quantitative Risk Analysis and Modeling Techniques
* Sensitivity analysis. Sensitivity analysis helps to determine which risks have the most potential impact on the project. It helps to understand how the variations in project's objectives correlate with variations in different uncertainties. Conversely, it examines the extent to which the uncertainty of each project element affects the objective being studied when all other uncertain elements are held at their baseline values. One typical display of sensitivity analysis is the tornado diagram (Figure 11-15), which is useful for comparing relative importance and impact of variables that have a high degree of uncertainty to those that are more stable. The Tornado diagram is also helpful in analyzing risk-taking scenarios enabled on specific risks whose quantitative analysis highlights possible benefits greater than corresponding identified negative impacts. A tornado diagram is a special type of bar chart used in sensitivity analysis for comparing the relative importance of the variables. In a tornado diagram, the Y- axis contains each type of uncertainty at base values, and the X-axis contains the spread or correlation of the uncertainty to the studied output. In this fgure, each uncertainty contains a horizontal bar and is ordered vertically to show uncertainties with a decreasing spread from the base values.