1 Performing Spreadsheet What-If Analysis Applications of Spreadsheets

2 Performing Spreadsheet What-If Analysis ► Microsoft Office Excel 2003 allows us to create dynamic models. ► A dynamic model uses formulas that instantly recalculate when you change values in cells to which the formulas refer. ► When you change values in cells in a systematic manner and observe the effects on specific formula cells, you are performing a type of what-if analysis.

3 Avoid Hard-coding Values in a Formula ► You should always set up your worksheet so that you have maximum flexibility to make changes. ► Do not hard-code values (i.e. use constants) in a formula! ► Store the values in separate cells and use cell references in the formula.

4 Types of What-If Analyses ► Excel gives you three basic options:  Manual what-if analysis – plug in new values and observe the effects on formula cells.  Data tables – create a table that displays the results of selected formula cells as you systematically change one or two input cells.  Scenario Manager – create named scenarios and generate reports that use outlines or pivot tables.

5 Performing What-If Analysis ► In an Excel worksheet, assumptions are  known as input cells or variables  are typically grouped together to speed data entry  outcome cells contain formulas that reference the input cells either directly or indirectly.

6 Performing Manual What-If Analysis ► Based on the idea that you have one or more input cells that affect one or more key formula cells. ► You change the value in the input cells and see what happens to the formula cells.  print the results or  save each scenario to a new workbook.

7 Creating Data Tables ► When working with a what-if model, Excel displays only one scenario at a time. ► Data tables allow you to summarize key formula cells for each scenario you run.  Manually create a table or  Use Excel’s Data  Table command to create a summary table automatically. ► Data tables can only deal with one or two input cells at a time.

8 Creating Data Tables ► A one-input data table displays the results of one or more formulas when you use multiple values in a single input cell. ► Can place the table anywhere in the worksheet. ► Usually the left column contains formulas or references to formulas located elsewhere in the worksheet.  Can use a single formula reference or any number of formula references.

9 Creating Data Tables ► The upper left cell of the table remains empty. ► Excel calculates the values that result from each level of the input cell and places them under each formula reference.

10 Creating Data Tables ► To create a one-input data table  Select the data table range  Choose Data  Table to open the Data Table dialog box.  Specify the worksheet cell that contains the input value (place this cell reference in the text box called Column Input Cell. (leave the Row Input cell field blank.)  Click OK, and Excel fills in the table with the appropriate results.

11 Creating Data Tables ► The data is generated with a multi-cell array formula.  An array formula is a single formula that can produce results in multiple cells. ► You can arrange a one-input table vertically or horizontally.  If you place the values of the input cell in a row, enter the input cell reference in the text box labeled Row input cell in the Table dialog box.

12 Working with One- and Two-Input Data Tables

13 Creating a One-Input Data Table EX0930 Worksheet used for creating a one-input data table in this lesson Worksheet used for creating a two-input data table in the next lesson

14 Preparing a One-Input Data Table

15 Creating a One-Input Data Table for Performing Two Calculations For a one-input data table, enter either a row input cell or a column input cell; but not both Outcome formulas Input cells

16 Formatting a One-Input Data Table

17 Creating a Two-Input Data Table ► Different from the one-input data table in that it can show the results of only one formula at a time.  The top row holds the values for the second input cell.  The upper-left cell of the table contains a reference to the single result formula.

18 Creating a Two-Input Data Table

19 A Two-Input Data Table

20 Using Scenario Manager ► Data tables are limited:  Can vary only one or two input cells at a time.  The process of setting up a data table is not intuitive.  A two-input data table shows the results of only one formula cell (you can create additional tables for more formulas, however).  Often you want to see just a few select combinations rather than an entire table of possible combinations.

21 Using Scenario Manager ► With Scenario Manager, you can automate your what-if models.  Store different sets of input values (aka changing cells) for any number of variable an give a name to each set.  Can then select a set of values by name and Excel will display the worksheet by using those values.

22 Using Scenario Manager  Can generate a summary report that shows the effect of various combinations of values on any number of results cells  Summary report can be an outline or a pivot table. ► To access the Scenario Manager  Select Tools  Scenarios  The Scenario Manager Dialog box displays  To add a scenario, click the Add button.

23 Using Scenario Manager Create a range name by selecting a cell and then typing in the Name box

24 Using the Scenario Manager ► The Add Scenario dialog box displays four parts:  Scenario Name – any name you want.  Changing Cells – the input cells for the scenario. ► Input the cell addresses directly, or point to them using the mouse. ► Multiple cells are allowed; don’t have to be adjacent. ► Each named scenario can use the same set of changing cells or different changing cells. (limit is 32)

25 Add Scenario Dialog Box Enter the input cells that you want to modify to achieve the desired outcome Enter a descriptive name for the scenario Enter an optional comment to describe the scenario

26 Using the Scenario Manager  Comment – by default, it is your name and the date.  Protection – there are two options that are in effect only when you protect the worksheet and choose the scenario option. ► Preventing changes – no one can modify the scenario. ► Hiding a scenario – doesn’t appear in the Scenario Manager dialog box.

27 Using the Scenario Manager ► Click OK to continue to the Scenario Values dialog box.  Displays one field for each changing cell that was specified in the previous step.  Enter the values for each cell in the scenario. ► Click OK to return to the Scenario Manager dialog box and create more scenarios if you desire.

28 Scenario Values Dialog Box

29 Displaying Scenarios ► The Scenario Manager dialog box displays all defined scenarios. To display one  Select one of the scenarios and click the Show button.  Excel inserts the corresponding values into the changing cells and calculates the worksheet to show the result for that scenario.

30 Modifying Scenarios ► To modify a scenario  Open the Scenario Manager dialog box.  Select the scenario you want to edit.  Click the Edit button.  In the Edit Scenario dialog box, click OK to access the Scenario Values dialog box.  Make your changes and click OK.  Excel automatically updates the comments box with new text stating when the scenario was modified.

31 Editing & Manipulating Scenarios The Prevent changes check box only protects a scenario when the active worksheet is protected

32 Merging Scenarios ► Can merge two or more scenarios into one workbook:  Click the Merge button in the Scenario Manager dialog box.  On the Merge Scenarios dialog box, ► choose the workbook from which you are merging in the Book drop-down list. ► choose the sheet that contains the scenarios you want t o merge from the sheet list box.  Click OK.

33 Merging a Scenario The dialog box tells you that this workbook contains one saved scenario

34 Generating a Scenario Report ► Click the Summary button in the Scenario Manager dialog box. ► On the Scenario Summary dialog box, select the report type:  Scenario Summary – the summary report appears in the form of an outline.  Scenario PivotTable – the summary report appears in the form of a pivot table. ► Specify the results cells (the cells that contain the formulas you are interested in.) ► Excel creates a new worksheet to store the summary table.

35 Creating a Scenario Summary Report

36 Displaying a Summary Report