IENG 423 Design of Decision Support Systems Modeling with Excel Excel Basics Scenario Analysis

The data that we enter in a spreadsheet may represent reality as we know it… …but what if there was a different reality…what if things were different, what might happen What if they were different from that

Scenario Analysis “The best way to predict the future is to invent it” "The future is not laid out on a track. It is something that we can decide, and to the extent that we do not violate any known laws of the universe, we can probably make it work the way that we want to." Alan Kay

Scenario Analysis Basically, that is what planning is all about… …how to invent the future For us, that is why we make decisions… …and we develop DSSs so we can make decisions more effectively

Scenario Analysis So what’s the big deal We can change values in a spreadsheet… …and the spreadsheet recalculates, …so we see what happened … And Excel is pretty good at this

Scenario Analysis But what if you make several changes,… …can you put things back the way they were? What if you have to figure out how to achieve a specific outcome What if you need to find the best mix of conditions to find an optimal outcome

Scenario Analysis Scenario Manager Lets you define multiple data scenarios and… See what would happen What if we increased this and this

Scenario Analysis Goal Seeking Finds what you would have to do to an input condition to achieve a goal How much would I have to raise X to get y to 30 percent

Scenario Analysis Solver Tries to find an a mix of inputs that will all you achieve an outcome