
Why Information Systems Matter in Business ◾ 13
their guesses for your money. You may be able to improve inaccurate data by taking more
time, spending more money, or both. It’s a business decision as to whether the increased
accuracy is worth it.
Sensitivity analysis is one way to gauge the need for accuracy. Suppose the cost of devel-
oping a new product is estimated at $15,000,000 and its sales are estimated at $100,000,000
over veyears. On that basis, the product is predicted to be protable. But what if the
estimates are o?
To carry out a sensitivity analysis, we ask if the product would be protable if develop-
ment costs and sales est ...