Scenario Analysis

A way to examine what could happen under different conditions

Scenario analysis explores several plausible ways a situation might develop. Instead of trying to predict one outcome, you examine how different conditions could lead to different results.

AI can help you identify important uncertainties, construct plausible scenarios, and examine how your choices might work under different conditions.

How to read a Scenario Analysis - 2:43

When to use it

Use scenario analysis when:

  • the future is uncertain

  • several factors could change the outcome

  • you want to prepare for more than one possible future

  • you are making a decision that will have effects over time

  • you want to test whether a plan works under different conditions

Try this with AI

Help me conduct a scenario analysis for [decision, plan, or situation]. Identify the most important uncertainties and create three or four plausible scenarios based on different conditions. For each scenario, describe what could happen, the assumptions behind it, the likely consequences, and what I could do in response. Separate known facts from assumptions and identify information that should be verified.

Then ask a follow-up

Which assumptions have the greatest effect on these scenarios? Which scenario would be most difficult for me to handle, and what could I do now to prepare for it?

You can then ask AI to change one assumption and show how the scenarios and possible responses would change.

A useful caution

Scenarios are ways of exploring possibilities, not predictions.

AI may produce scenarios that sound plausible without having enough evidence to support them. It may give too much attention to dramatic possibilities or overlook a more ordinary outcome.

Ask what evidence supports each scenario and which assumptions drive it. Treat uncertain future conditions as uncertain.

Remember

Scenario analysis helps you prepare for several possible futures. It does not tell you which future will occur.