What-if scenario analysis (WISA) is a business planning and modeling technique used to yield various projections for some outcome based on selectively changing inputs.
Scenario planning allows a business to respond to alternative situations more quickly and effectively because they have developed strategies to rely upon. A scenario, in this context, is a potential circumstance or combination of circumstances that could have a significant impact -- whether good or ill -- on an organization.
A business can use what if scenario analysis to see how a given outcome, such as project costs, might be affected by changes in particular variables, such as the late delivery of supplies or the unavailability of key personnel.
In project management, for example, WISA can help users see how changing data for specific dates and costs changes the completion date and/or total cost of the project. Alternate calculations with various inputs enables a more informed prediction about potential outcomes and allows the business to plan how to handle the various scenarios quickly and effectively.
In general, a what-if scenario is an informal speculation about how a given situation might be handled. For example, an interviewer might ask a prospective employee how he would handle a given situation.
See a video demonstration of what-if scenario analysis in Excel: