Scenario Planning Engine

When to use

Use whenever a plan depends on uncertain drivers and needs base, upside, and downside cases, especially when the current version of "scenario planning" is three narrative paragraphs with no probabilities and no check on whether the downside case is actually survivable.

What it does

Assigns probabilities to each scenario, computes the probability-weighted expected value via a bundled calculator, and checks the downside case against a stated minimum threshold (minimum cash balance, covenant floor, breakeven level) — surfacing explicitly when the downside case would breach something the business can't survive, not just report a number that looks concerning.

Method

1. Define the scenarios on real driver differences, not just "pessimistic version of the same story" — name what's actually different in each case (a specific customer churns, a specific cost line moves, a specific macro assumption shifts).
2. Assign probabilities that sum to 1.0, using structured judgment (ask multiple people independently and reconcile) rather than one person's gut split. Label the confidence behind the probabilities explicitly.
3. Compute each scenario's value for the metric in question using consistent methodology across all three cases — the same driver logic, just different inputs.
4. Run the bundled calculator (scripts/scenario_engine.py) to get the probability-weighted value, and the best/worst case bounds.
5. State the minimum threshold explicitly if one exists — minimum cash the business needs, a covenant floor, a breakeven level — so the calculator can check the downside against it rather than leaving that check to a human skimming a table.
6. Read the headroom flag literally. If the downside case breaches the threshold, that's the headline finding of the whole exercise, not a footnote under the weighted average.
7. For any downside scenario with thin headroom (under 15%), name the mitigation or trigger plan — what specifically happens if this scenario starts to unfold, and how early it would be visible.