Introduction
Imagine you have a list of things you own, like toys, books, or clothes. Now, if someone asks you to make a list and count how many items you have, there might be some uncertainty. Maybe you forgot about a few things or made a mistake in counting. That uncertainty is like a doubt or a lack of complete confidence in your list.
In the business world, especially when dealing with products or inventories (the stuff a company owns), it’s crucial to be aware of uncertainties. Uncertainty assessment is like a careful process of figuring out how certain or unsure we are about the information we have about what a company owns.
Why is Uncertainty Assessment Important?
- Interpretation of Results: Let’s say a company makes a list of all its products. Knowing how certain or uncertain they are about that list is essential. It helps them understand if they can fully trust the information or if there are doubts.
- Improving Quality: If there are doubts or uncertainties, a company can work on improving the accuracy of its inventory. This might involve checking the list more carefully, using better tools, or training employees to be more precise.
- Building Confidence: Imagine sharing your list with others, like friends or family. If you’re confident about the list, they’ll trust it more. Similarly, in business, if a company can communicate how confident it is in its inventory, it builds trust with others, like investors or customers.
Who Cares About Uncertainty?
Different people care about this uncertainty information. It could be the company’s managers, investors, or even customers. Imagine if you were buying something from a store – you’d want to know if the store is sure about what it has in stock, right?
Making it Practical:
This blog(Part 1- Requirements) and next blog(Part 2- Guidance) provides rules and advice to help companies understand and communicate uncertainty. It’s like a guidebook to make sure companies don’t just know about uncertainties but also do something practical to handle them. This guidebook considers that people in companies might have different levels of knowledge about uncertainties, so it’s designed to be useful for everyone.
Requirements
Companies shall report a qualitative statement on sources of inventory uncertainty and methodological choices. Methodological choices include:
- Use and end-of-life profile
- Allocation methods, including allocation due to recycling
- Source of global warming potential (GWP) values used
- Calculation models
