You should think of the concept Ancestor as your own ancestor, or forefather.

Base Scenario is the head of the "family" and is the ancestor for all other scenarios, but has no ancestor itself.  Scenario 2-1 has two ancestor, Base Scenario and Scenario 2 and is also the ancestor for two scenarios, Scenario 2-1-1 and Scenario 2-2-1.   As you can see, this works like your own family tree, and therefore there is no limits for how many ancestor you can have.

Each time you run Action Choices you need to choose an ancestor you whish to compare your new scenario to.  

In the example below, we are about to make the  Scenario 2-1  for Medtronic.

You have to decide if you want this scenario to be based on comparison to either 'Base scenario' or 'Scenario 2 '. 

After choosing the ancestor, a new scenario for the same organization will be created.