Scenario Analysis
Definition
Scenario analysis compares multiple possible future developments as a basis for decisions under uncertainty.
Scenario analysis examines several internally consistent possible future developments to make decisions under uncertainty more robust.
Simply explained
You play through various coherent future scenarios and check how your decision would perform in each of them.
Why it matters in practice
The term helps to select, develop, evaluate AI systems in a well-founded manner and realistically assess their technical risks.
Example from business
A medium-sized company evaluates investments under scenarios for demand, energy prices, and delivery times.
Limits and pitfalls
- Scenarios are not forecasts; arbitrary assumptions or lack of action references produce only narratives.
Origin & history
Military planning and corporate strategy shaped the method in the 20th century; it was later formalized in risk and climate analyses.
Use in mid-sized companies
- Possible application: A medium-sized company evaluates investments under scenarios for demand, energy prices, and delivery times.
Frequently asked questions
What does scenario analysis mean?
Scenario analysis examines several internally consistent possible future developments to make decisions under uncertainty more robust. What should one watch out for? Scenarios are not forecasts; arbitrary assumptions or lack of action references produce only narratives.
Sources
- Recommendations and Supporting Guidance · TCFD, Recommendations and Supporting Guidance
Source checked on 10.10.2026. Editorial use cases are hypothetical; no evidence of real customer results.
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