How to model scenarios around delay
YYou might have noticed yesterday's article regarding how to model a delay,?In that article we were imagining a contract potentially arriving late, or a cost reduction happening more slowly than previously anticipated.?When modelling delay what we did was put a series of switches (timing flags) across the model to control when the revenue or cost reduction started and finished.
Scenarios plus delay equals delay scenarios
From yesterday's article you can see how to model a delay, but imagine that you wanted to try out a few different delay scenarios at the same time.?You don’t want to sit there all day playing with the yellow cells that control when the contract starts and finishes.?What you want to do is store a few scenarios in the model (the revenue could arrive early, late, or at some point in-between).?
What you want to do is swap between those multiple different delay scenarios at the flick of a switch, seeing the impact on the business and cash flow immediately.?What you need to do is combine, hopefully elegantly, scenario switching with the delay.
4 steps to modelling delay scenarios
Here are the steps to combining delay with scenarios around delay:
1. list out the scenario inputs (the yellow cells spread across the page in rows 22, 24 and 29 – headed with the scenario names “early” “mid” and “late”).
2. develop a scenario switch (cell C15) and make it more user friendly by controlling it with data validation.
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3. translate the name of the scenario into a number ahead of the next step 4.
4. make sure your model contains a formula that picks out the timing flag that relates to the correct delay scenario – like the formula you can see in cell J37.
That’s about all there is to it.??In the previous article you could see how to model a delay.?Here (very simply) you can see how to model multiple different scenarios around delay.
Modelling delay scenarios doesn't have to be too complicated
With some short and sweet switching it really is possible to model something as complex as multiple different delay scenarios – without getting your model in a total knot!