There are different types of charts used in project management. The tornado diagram is a special bar chart that is used in sensitivity analysis. The sensitivity analysis is a modeling technique that determines which risks have the most impact on the project. As one of the tools used in sensitivity analysis, the tornado diagram is used to compare the importance (relative) of different variables.
The tornado diagram is one of the methods used to display the sensitivity analysis. It is used to compare the relative importance as well as the impact of variables with a high degree of uncertainty to those that are stable. It is also used in analyzing the risk-taking scenarios at specific risks that can have greater benefits than negative impacts.
As a special type of bar chart, it displays the comparison of the relative importance of different variables. For this particular chart, the Y-axis contains uncertain variables at their base values while the X-axis contains the correlation of the uncertainty to a studied and known output. Thus, the bar contains a horizontal bar but is ordered vertically to show the uncertainties that have decreasing correlation from the base values.
This term is defined in the 5th edition of the PMBOK.