American Institute of Certified Planners (AICP) Practice Exam

Which of the following refers to a "what if" analysis for future assumptions?

1. Forecast

2. Projection

3. Scenario Planning

4. Risk Analysis

The correct answer is: Projection

The correct choice refers to "Scenario Planning," which is an analytical method used to envision and evaluate potential future events by considering a range of possibilities. This approach is particularly useful in planning because it enables decision-makers to explore various "what if" scenarios that take into account different assumptions, uncertainties, and unexpected developments. Scenario planning encourages a more flexible and adaptable strategic perspective, allowing planners to identify potential risks and opportunities and prepare for multiple outcomes. It differs from straightforward projections or forecasts, which typically rely on current trends and data to make singular predictions about the future rather than exploring a variety of alternative scenarios. The other options, while related to forecasting and planning, do not focus specifically on the exploration of multiple future possibilities in the same way. Forecasting and projections are generally about predicting outcomes based on existing data and trends, often leading to a singular expected future rather than a range of possible futures. Risk analysis, on the other hand, focuses on identifying and evaluating risks associated with uncertain future events without the same emphasis on scenario building.