BUSINESS DRIVEN TECHNOLOGY Decision Analysis Tools in Excel Plug-In T3: Decision Analysis Tools in Excel

Describe the use of a PivotTable LEARNING OUTCOMES Describe the use of a PivotTable Summarize the tools used when building a PivotTable Compare the functions of Goal Seek and Solver List the advantages of using the Scenario Manager 1. Describe the use of a PivotTable A PivotTable analyzes, summarizes, and manipulates data in large lists, databases, worksheets, or other collections. It is called a PivotTable because fields can be moved within the table to create different types of summary lists providing a “pivot.” PivotTables offer flexible and intuitive analysis of data. 2. Summarize the tools used when building a PivotTable Row field — Row field labels have a row orientation in a PivotTable report and are displayed as row labels. These appear in the ROW area of a PivotTable report layout. Column field — Column field labels have a column orientation in a PivotTable report and are displayed as column labels. These appear in the COLUMN area of a PivotTable report layout. Data field — Data fields from a list or table contain summary data in a PivotTable, such as numeric data (e.g., statistics, sales amounts). These are summarized in the DATA area of a PivotTable report layout. Page field — Page fields filter out the data for other items and display one page at a time in a PivotTable report. 3. Compare the functions of Goal Seek and Solver Goal Seek is an analytical function that attempts to find the value of the inputs necessary to achieve a desired level of output. The Goal Seek function can eliminate unnecessary calculations that can be used to determine a single variable value in a formula. Solver is best used for forecasting for problems that contain more than one variable. The Solver add-in utility is needed to analyze the scenarios in decision-making situations that involve consideration of values and constraints for several variables simultaneously. This function uses multiple changing variables and constraints to find the optimal solution to solve a problem. 4. List the advantages of using the Scenario Manager Scenario Manager allows 32 different scenarios or groups of values to be defined. The Scenario Manager can then be used to selectively display the desired values or scenario in the worksheet. The Scenario Manager eliminates the need to have multiple copies of the same worksheet representing different situations. For each group of input values a scenario must be named and stored before it can be used.

There are four topic areas in this plug-in: Introduction There are four topic areas in this plug-in: The PivotTable function is an organization and analysis tool that displays fields and records The Goal Seek function is used to find an unknown value that produces a desired result The Solver function is used to calculate an optimum solution based on several variables and constraints The Scenario Manager function is used to create and evaluate a collection of “what-if” scenarios containing multiple input values

PivotTables A PivotTable analyzes, summarizes, and manipulates data in large lists, databases, worksheets, or other collections PivotTables offer flexible and intuitive analysis of data The data in the data area of the PivotTable cannot be directly entered or changed

PIVOTTABLE TERMINOLOGY Row field - a row orientation in a PivotTable report and are displayed as row labels Column field - a column orientation in a PivotTable report and are displayed as column labels Data field - list or table contain summary data in a PivotTable, such as numeric data Page field - filter out the data for other items and display one page at a time in a PivotTable report

BUILDING A PIVOTTABLE Build a PivotTable with the Data, PivotTable, and PivotChart Report option, which displays a series of PivotTable Wizard dialog boxes The wizard steps through the process of creating a PivotTable

BUILDING A PIVOTTABLE

Using the PivotTable Feature Select the PivotTable Data worksheet from the Analysis Data.xls workbook Click any cell in the list Excel knows to use the data in the Excel list to create a PivotTable Choose Data, PivotTable and PivotChart Report The PivotTable and PivotChart Wizard — Step 1 of 3 dialog box opens

Using the PivotTable Feature

Using the PivotTable Feature In the Where Is the Data That You Want to Analyze? area, choose Microsoft Excel List or Database In the What Kind of Report Do You Want to Create? area, choose PivotTable Click the Next button The PivotTable and PivotChart Wizard — Step 2 of 3 dialog box opens In the Range box, the range should be $A$1:$E$49

Using the PivotTable Feature The PivotTable and PivotChart Wizard — Step 3 of 3 dialog box opens This is used to tell Excel whether to place the PivotTable on an existing or new worksheet Select New Worksheet Click the Layout button Excel opens the PivotTable and PivotChart Wizard—Layout dialog box

Using the PivotTable Feature

Using the PivotTable Feature The fields appear on buttons to the right in the dialog box These currently are the column fields The four areas you can define to create your PivotTable are ROW, COLUMN, DATA, and PAGE.

Using the PivotTable Feature Drag the field buttons to the areas to define the layout of the PivotTable Drag the Month button to the PAGE area Drag the Sales button to the DATA area Drag the Region button to the COLUMN area Drag the Magazine button to the ROW area Click OK to return to the PivotTable and PivotChart Wizard — Step 3 of 3 dialog box Click the Finish button

Using the PivotTable Feature

MODIFYING A PIVOTTABLE VIEW After a PivotTable is built, modifications can be done at any time Drag the buttons off the diagram, and arrange the fields like this: Magazine in the PAGE area Month in the COLUMN area Sale in the DATA area Sales Rep in the ROW area

Modifying A PivotTable View

PIVOTTABLE TOOLS PivotTable - A menu that contains commands for working with a PivotTable Format Report - Enables the user to format the PivotTable report Chart Wizard - Enables the user to create a chart using the data in the PivotTable Hide Detail - Hides the detail information in a PivotTable and shows only the totals Show Detail - Shows the detail information in a PivotTable

PIVOTTABLE TOOLS Refresh External Data - Allows the user to refresh the data in the PivotTable after changes to data are made in the data source Include Hidden Items in Totals - Lets the user show the hidden items in the totals Always Display Items - Always shows the field item buttons with drop-down arrows in the PivotTable Field Settings - Displays the PivotTable Field dialog box so that the user can change computations and their number format Hide Field List - Hides and shows the PivotTable Field List window

BUILDING A PIVOTCHART PivotChart - a column chart (by default) that is based on the data in a PivotTable To build a PivotChart: Click the Chart Wizard on the PivotTable toolbar Excel will automatically create a new worksheet, labeled Chart 1, and display the current PivotTable information in chart form

BUILDING A PIVOTCHART

Goal Seek Goal Seek - an analytical function, which allows a value in a formula to be adjusted in order to reach a desired result or answer The Goal Seek feature can eliminate unnecessary calculations Goal Seek repeatedly tries new values in the variable cell to find a solution to the problem

Goal Seek

Using the Goal Seek Command To use the Goal Seek command: Choose Tools, Goal Seek Specify the cell that contains the desired value in the Set cell text box Type in or select B3 Enter the desired value or answer in the To value text box Type in 2500 Enter the cell whose value will be changed in the By changing cell text box Type in or select $B$1 Choose OK If a solution is found, the Goal Seek Status dialog box appears Select OK

Using the Goal Seek Command

Using the Goal Seek Command

Solver Solver - part of a suite of functions sometimes called what-if analysis tools Solver is used when forecasting a problem contains more than one variable Solver uses multiple changing variables and constraints to find the optimal solution to solve a problem

If it has not already been installed, do the following: INSTALLING SOLVER Both Goal Seek and Solver tools come with the standard Excel package, but Solver has to be installed If it has not already been installed, do the following: Open Excel and go to Tools, Add-Ins After clicking Add-Ins, scroll down to Solver Add-in and click the box

SETTING UP THE PROBLEM Build a Solver-friendly worksheet, set up the table similar to Figure T3.10:

SETTING UP THE PROBLEM The three variable cells in the worksheet are cells D5, D9, and D13 In the bottom-right corner of the screen is a list of constraints to use for forecasting The worksheet must contain cells (G6 through G8) that contain the formulas used as constraints The limiting values for the constraints are listed in cells G11 through G13 No more than 500 total cups of coffee (both regular and premium) No more than 350 cups of premium coffee (both caffe latte and caffe mocha) No more than 125 caffe mochas

SETTING UP THE PROBLEM The subtotals for cells D6, D10, D14 need to be calculated, as well as the Total Revenue (sum of D6, D10, and D14) The value for cell G6 should equal the value that will be calculated for D5 and the value for cell G7 will be the sum of the values from D9 and D13 Click the target cell G4 — the one containing the formula that is based on the variable cells you want the Solver to determine Choose Tools, Solver Select the Set Target Cell text box (unless it already contains the correct reference), and then click cell G4 to insert $G$4 as the target cell

SETTING UP THE PROBLEM

SETTING UP THE PROBLEM Select the By Changing Cells text box Click the button in the text box to collapse the dialog box Select each of the variable cells by holding down the Ctrl key and clicking D5, D9, and D13

Click Add to add the first constraint in the Add Constraint dialog box SETTING UP THE PROBLEM Click Add to add the first constraint in the Add Constraint dialog box The first constraint is Pony Espresso can sell only 500 cups of coffee in one week To enter this constraint, click cell G8, click <= in the operator drop-down list, and with the insertion point in the Constraint text box, type or click cell G11 Click Add to enter the first constraint and begin the second constraint — Pony Espresso can sell only 350 premium coffees in one week

SETTING UP THE PROBLEM With the insertion point in the Cell Reference text box, click cell G7, click <= in the operator drop-down list, and in the Constraint text box, type or click cell G12 Click Add to enter the second constraint and begin the third — Pony Espresso can sell only 125 caffe mochas in one week Click cell D13, click <= in the operator drop-down list, and in the Constraint text box, type, or click cell G13 Click OK to add all three constraints to the Solver Parameters dialog box

SETTING UP THE PROBLEM

SETTING UP THE PROBLEM Click Solve to calculate the result, solver displays a dialog box describing the results of the optimization analysis To display the new solution in the worksheet, click the Keep Solver Solution option button, and then click OK

SETTING UP THE PROBLEM

EDITING A SOLVER FORECAST Choose Tools, Solver Click the Value Of option button and type 800 in the text box to the right The Value Of option button sets the target cell to a particular goal to determine the variable mix needed to reach the milestone

EDITING A SOLVER FORECAST Click Solve to find a solution to the problem

Scenario Manager Scenario - a set of input values and corresponding results from calculations that Excel can save and report as needed A worksheet can be used to conduct a “what-if” analysis on a particular set of data Excel’s Scenario Manager allows 32 different scenarios or groups of values to be defined

SETTING UP SCENARIOS Each group of input values or scenario must be named and stored before it can be used To set up a Scenario: Open the worksheet Scenario Data.xls

SETTING UP SCENARIOS Select the cells containing the first set of values to store in a scenario On the toolbar, select Tools, Scenarios Click Add to display the Add Scenario dialog box Enter Original for the Scenario name In the Changing Cells text box, type D9:D11 or use the Collapse Dialog button at the right side of the text box to manually select the cells that hold the Number of Technicians, Regular Hours, and Over Time Hours values

SETTING UP SCENARIOS Choose OK The Scenario Values dialog box will display the values for cells D9, D10, and D11 as 1, 300, and 0 Click OK

SETTING UP SCENARIOS Once the original has been saved, the what-if scenarios need to be created Click Add In the Add Scenario dialog box, type Single Contractor Overtime Click OK In the Scenario Values dialog box for cell D10, type 300 and for cell D11 enter 40 The value in D9 remains at 1 Ensure that the Single Contractor Overtime scenario is selected, and click Show Excel reports that this project will need an additional $3,000

SETTING UP SCENARIOS

SETTING UP SCENARIOS Create one more scenario In the Scenario Manager dialog box, click Add In the Scenario Name text box, type Two Contractors No Overtime The Changing Cells (D9:D11) should already appear in the proper text box Click OK to invoke the Scenario Values dialog box

SETTING UP SCENARIOS Two outside contractors are brought in (by charging $200 for each additional technician) Enter 2 in the text box for cell D9 and 0 in the text box for cell D11 In cell D10’s text box, type =300/2 Click OK, a message box says that Excel converted the formula into a value Click OK to dismiss the message Select Two Contractors and click Show Excel displays 150 in cell D10 even though the total hours are 300 This scenario gives a completion cost of $15,200

Compare each scenario to determine the best solution, such as: Compare the Scenarios Compare each scenario to determine the best solution, such as: Scenario Cost Original $15,000 Single Contractor Overtime $18,000 Two Contractors No Overtime $15,200

Once scenarios have been defined, the data values can be modified MODIFYING A SCENARIO Once scenarios have been defined, the data values can be modified To modify a Scenario: Choose Tools, Scenarios Select the desired Scenario name Choose Edit Modify the Scenario information, as desired Close the Scenario Manager dialog box

CREATING A SCENARIO SUMMARY REPORT The Summary Report creates a report that summarizes the result cells that are affected by a scenario The Summary Report appears in the form of a summary table that is placed on a new worksheet, which can be printed

CREATING A SCENARIO SUMMARY REPORT To Create a Scenario Summary Report: Choose Tools, Scenarios Choose Summary Choose Scenario summary in the Report type group box In the Result cells text box, type in D7, D12, D15, D16, D17 Result cells are the cells affected by the specified scenario Choose OK

CREATING A SCENARIO SUMMARY REPORT