Decision Analysis Tools in Excel

Technology Plug-In: T3

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Learning Outcomes

1. Describe the use of a PivotTable

2. Summarize the tools used when building a PivotTable

3. Compare the functions of Goal Seek and Solver

4. List the advantages of using the Scenario Manager

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Introduction

1. The PivotTable function is an organization and analysis tool that displays fields and records

2. The Goal Seek function is used to find an unknown value that produces a desired result

3. The Solver function is used to calculate an optimum solution based on several variables and constraints

4. The Scenario Manager function is used to create and evaluate a collection of “what-if” scenarios containing multiple input values

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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

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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

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

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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

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

Click the Next button

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. The fields appear on buttons to the right in the dialog box.

The four areas you can define to create your PivotTable are ROW, COLUMN, DATA, and PAGE.

Drag the field buttons to the areas to define the layout of the PivotTable Drag the Region button to the COLUMN areaDrag the Magazine button to the ROW area

Drag the Month button to the PAGE areaDrag the Sale button to the DATA area

Click OK to return to the “PivotTable and PivotChart Wizard — Step 3 of 3” dialog boxClick the Finish button

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 areaMonth in the COLUMN area

Sale in the DATA areaSales Rep in the ROW area

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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

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PivotTable Tools

Refresh External Data refresh the data in the PivotTable after changes to data are made in the data source

Include Hidden Items in 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

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Building PivotChart

PivotChart - a column chart (by default) that is based on the data in a PivotTable

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

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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

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Using the Goal Seek Command

Choose Tools, Goal Seek

Specify the cell that contains the desired value in the Set cell text box

Enter the desired value or answer in the To value text box

Enter the cell whose value will be changed in the By changing cell text box

Choose OK If a solution is found, the Goal Seek Status dialog box

appears

Select OK

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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 Solver 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

Build a worksheet, set up the table similar to Figure T3.10:

To reach the specified amount of total revenue (G4) by determining regular coffee cups needed to sell (D5)premium latte cups needed to sell (D9)

premium mocha cups needed to sell (D13)subjected to three constraints (G11, G12, G13)

=D9+D13

=G6+G7

=D5

=D4*D5

=D8*D9

=D12*D13

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Setting Up the Problem

Choose Tools, Solver Select $G$4 into the “Set Target Cell:” text box In the “By Changing Cells:” text box, select each of the

variable cells by holding down the Ctrl key and clicking D5, D9, and D13

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Setting Up the Problem

Add three constraints to the “Subject to the Constraints:” text box in the Solver Parameters dialog

Click Solve to calculate the result

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Setting Up the Problem

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

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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

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Editing A Solver Forecast

Click Solve and then OK butoon to find a solution to the problem

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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

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Setting Up Scenarios

Each group of input values or scenario must be named and stored before it can be used

Open the worksheet Scenario Data.xls 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, use the Collapse Dialog

button to manually select the cells that hold the Number of Technicians, Regular Hours, and Over Time Hours values (D9:D11)

Choose OK

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Setting Up Scenarios

The Scenario Values dialog box will display the values for cells D9, D10, and D11 as 1, 300, and 0

Click OK

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Setting Up Scenarios

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,

for cell D11 enter 40, and the value in D9 remains at 1 Click OK Ensure that the Single Contractor Overtime scenario is

selected, and click Show

Single Contractor Overtime

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Setting Up Scenarios

Click Add In the Add Scenario dialog box, type Two Contractors

No Overtime Click OK In the Scenario Values dialog box

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 Click Show

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Modifying A Scenario

Once scenarios have been defined, the data values can be modified

To modify a Scenario:1. Choose Tools, Scenarios2. Select the desired Scenario name3. Choose Edit4. Modify the Scenario information, as desired5. Close the Scenario Manager dialog box

Compare the Scenarios

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Creating 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