Sensitivity Analysis

Sensitivity analysis demonstrates model output changes according to model input variations. A model is regarded a sensitive model with regards to an input if altering the variable input modifies the model output. The variability of the output (numeric or in any other form) may be quantitatively or qualitatively allocated to various origins of input variances.
A mathematical model can be outlined with the help of a number of input elements, set of equations, variable quantities, and other parameters, that are targeted to describe the procedure being used. Inputs are associated with a large number of origins of uncertainty and these involve erroneous measurements, lack of data, as well as inadequate comprehension of the propelling forces and procedures.

The models have to satisfy or fulfill the characteristic intrinsical variance of the arrangement, for example, the happening of random events. Sensitivity analysis and uncertainty analysis provide logical devices for portraying the uncertainties related to a model.

Sensitivity analysis is utilized for ascertaining the following: The quality of model explanation

  • Similarity of the model with the procedure in consideration.
  • The elements that largely contribute to the variation in output.
  • The domain in the space of input elements for which the variability of the model is the highest.
  • Unstable and optimal domains in the area of elements for application in an ensuant calibration survey.
  • Mutual or reciprocal action between elements

Sensitivity analysis has become quite common for the following domains:
Risk analysis
Signal processing
Financial applications
Neural networks

There are various processes for carrying out sensitivity analysis and uncertainty analysis. The most fundamental method used for sensitivity analysis is based on sampling. The values are taken from the input element distributions. Usually, sensitivity analysis and uncertainty analysis are carried out in combination with help from probability distribution.

The different steps involved are as follows:
Defining the target function and choosing the input of interest.
Allotment of a distribution function to the chosen elements
Producing a matrix of inputs with the help of distribution by a suitable design.
Assessing the model and calculating the target function distribution.
Choosing a technique for evaluating the impact or comparative weight of every input element on the target function.
Sensitivity analysis can be implemented for the following business applications:
Distinguishing vital presumptions or comparisons between alternative model forms.
Direction of data gathering in the future
Determination of crucial criteria
Maximization of the tolerance level of produced portions in association with the uncertainty involved in the parameters.
Maximization of resources apportionment
Model lumping or simplification of model

 

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Last Updated on : 27th June 2013

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