Five elements of cost have been selected for consideration in a sensitivity anal

Question

Five elements of cost have been selected for consideration in a sensitivity analysis. The best way to proceed is: Make each change separately, each time starting from the original cost. Make changes to all five elements and then note the net change. Make changes to all five elements and then note the collective change in the overall cost. Change the first element of cost to arrive at a revised cost, then change the second element and note the change from the first revised cost, then change third element, and so on.

Explanation / Answer

Answer is "Make each change separately, each time starting from the original cost."

All the elements are changed one by one separately to ascertain the sensitivity of tht particulr element.

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