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- Sundara Ram [email protected]
Feb 16th, 2015
Day 10
Microsoft Excel – What if Analysis: Goal Seek and Scenario Manager
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IMPORTANT ANNOUNCEMENTS !!!
• Homework #3 is due by 2/20/2015.
• All the MyITLab/ HW’s are due by 11:59 pm on the due date specified.
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GOAL SEEK
• Whenever you create a formula or function in Excel, you put various parts together to calculate a result.
• Goal Seek works in the opposite way: It lets you start with the desired result, and it calculates the input value that will give you that result
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USING GOAL SEEK
• You currently have a grade of 65, and you need at least a 70 to pass the class. Luckily, you have one final assignment that might be able to raise your average.
• You can use Goal Seek to find out what grade you need on the final assignment to pass the class.
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USING GOAL SEEK
• In the image in Slide 4, you can see that the grades on the first four assignments are 58, 70, 72, and 60. Even though we don't know what the fifth grade will be, we can write a formula, or function, that calculates the final grade.
• In this case, each assignment is weighted equally, so all we have to do is average all five grades by typing =AVERAGE(B2:B6).
• Once we use Goal Seek, cell B6 will show us the minimum grade we'll need to make on that assignment.
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USING GOAL SEEK
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• Select the cell whose value you wish to change. Whenever you use Goal Seek, you'll need to select a cell that already contains a formula or function.
• In our example, we'll select cell B7 because it contains the formula =AVERAGE(B2:B6).
• From the Data tab, click the What If Analysis command, then select Goal Seek from the drop-down menu.
USING GOAL SEEK
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• A dialog box will appear with three fields:
– Set cell: This is the cell that will contain the desired result. In our example, cell B7 is already selected.
– To value: This is the desired result. In our example, we'll enter 70 because we need to earn at least that to pass the class.
– By changing cell: This is the cell where Goal Seek will place its answer. In our example, we'll select cell B6 because we want to determine the grade we need to earn on the final assignment.
– When you're done, click OK.
USING GOAL SEEK
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• The dialog box will tell you
if Goal Seek was able to
find a solution. Click OK.
• The result will appear in the specified cell. In our example, Goal Seek calculated that we will need to score at least a 90 on the final assignment to earn a passing grade.
SCENARIO MANAGER
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• The Scenario Manager is an easy way to automate some inputs of our what-if models.
• We can store different sets of input values (they are called changing cells in Scenario Manager) for any number of variables and give a name to each set.
• In our example we would now create scenarios for two different values of averages one for 70 and another for 60.
STEP BY STEP PROCEDURE TO DO SCENARIO ANALYSIS
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• Before we add or create a scenario, first important thing is to have the particular scenario created and displayed on our excel sheet.
• So as discussed in the previous slides, via Goal seek we have found out we need to score at least 90 in the final exam so that our average would be 70.
STEP BY STEP PROCEDURE TO DO SCENARIO ANALYSIS
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• Once we have the scenario right in front of us, Choose Data Data ➪Tools What-If ➪Analysis Scenario ➪Manager. Scenario Manager dialog box will appear in the screen.
• When we shall add named scenarios, they will appear in the Scenarios list in the dialog box.
STEP BY STEP PROCEDURE TO DO SCENARIO ANALYSIS
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• Adding a scenario
– Click the Add button in the Scenario Manager dialog box to add a scenario.
– Excel will display the Add Scenario dialog box, shown in the following figure.
STEP BY STEP PROCEDURE TO DO SCENARIO ANALYSIS
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• Adding values to scenario’s– In our example, we are creating a scenario for having an
average value of 70 in the final exam.– Give an appropriate name to the scenario say ‘Avg70’. Next
under changing cells, we need to give the Cell address where Goal seek was trying to calculating the result which B6 in our case.
STEP BY STEP PROCEDURE TO DO SCENARIO ANALYSIS
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• Click on OK and in the next step also click on OK by verifying whether the cell is B6 or not.
• You scenario now under the name of ‘Avg70’ gets created. Similarly create a scenario under the name of ‘Avg60’ by starting with Goal Seek step.
STEP BY STEP PROCEDURE TO DO SCENARIO ANALYSIS
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• Now we have created the two scenarios namely
Avg70 and Avg60.
• In order to view the scenario’s select the corresponding scenario and click on Show in order to view the scenario.
