Analyzing Sensitivities with Indifference Curves

All Industries, Financial Model, General Excel Financial Models

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Indifference curves is a smart analytical tool showing the cross-sensitivity of output to two inputs. Each curve corresponds to a fixed output value and shows at which combination of the two inputs this output remains at the same level (or is indifferent, hence the name of the chart type).

Looking at indifference curves, one can answer trade-off questions such as:

If we lose a certain volume of one product, by how much shall we raise sales of another one to keep profits stable?
If we reduce the price of a product, how much additional volume of this product do we need to sell to make this profit-neutral?
What share of a country’s market can we sacrifice if we increase our share in another country’s market by x %?
etc. etc.

The utility is available in two versions:

1) A fully functional file, but with VBA code locked
2) Same file with VBA code unlocked

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