It is also possible to run sensitivity tests on this model. In this case we can consider uncertainties now only in the basic cost assumptions, but also in the basic market parameters. Using the sensitivity control file (financ02.vsc):
average payable delay = RANDOM_UNIFORM(.07,.11)
billing processing time = RANDOM_UNIFORM(.03,.05)
fractional loss rate = RANDOM_UNIFORM(.05,.08)
interest rate = RANDOM_UNIFORM(.09,.15)
price = RANDOM_UNIFORM(.9,1.2)
variable production cost = RANDOM_UNIFORM(.5,.7)
capacity cost = RANDOM_UNIFORM(.4,.6)
initial customers = RANDOM_UNIFORM(90000,110000)
sales fraction = RANDOM_UNIFORM(.004,.006)
We can simulate this and get the results on net income:
Here the range of possible outcomes is enormous. Similarly if we look at the net present value of income we get:
