Recommending action based on scenario analysis
You are the financial analyst for SwiftRide, a ride-sharing startup that is planning to expand into a new city. Since profitability depends on multiple uncertain factors (such as demand, competition, and fuel costs), your team conducted a scenario analysis to evaluate different potential outcomes.
Your goal is to interpret the results and recommend the best course of action.
The company analyzed three scenarios using key financial and operational variables:
| Scenario | Projected Monthly Revenue | Projected Operating Costs | Projected Net Profit/Loss |
|---|---|---|---|
| Baseline (Expected Conditions) | $500,000 | $450,000 | +$50,000 (Profit) |
| Best-Case (High Demand, Low Costs) | $700,000 | $400,000 | +$300,000 (Profit) |
| Worst-Case (Low Demand, High Costs) | $350,000 | $480,000 | - $130,000 (Loss) |
Looking at the scenario results, which effective action would you recommend to SwiftRide?
This exercise is part of the course
Advanced Probability: Uncertainty in Data
Hands-on interactive exercise
Turn theory into action with one of our interactive exercises
Start Exercise