BUSINESS DRIVEN TECHNOLOGY

Plug-In T3: Decision Analysis Tools in Excel

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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

• There are four topic areas in this plug-in: 1. The PivotTable function is an organization and analysis

tool that displays fields and records2. The Goal Seek function is used to find an unknown

value that produces a desired result3. 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

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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

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BUILDING 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

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Using the PivotTable Feature

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• 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

Using the PivotTable Feature

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• 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

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Using the PivotTable Feature

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• 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

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• 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

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Using the PivotTable Feature

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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

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Modifying A PivotTable View

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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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• 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

PIVOTTABLE TOOLS

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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

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BUILDING A PIVOTCHART

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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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Goal Seek

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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

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Using the Goal Seek Command

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Using the Goal Seek Command

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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

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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

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SETTING UP THE PROBLEM

• Build a Solver-friendly worksheet, set up the table similar to Figure T3.10:

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• 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

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• 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

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SETTING UP THE PROBLEM

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• 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

SETTING UP THE PROBLEM

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• 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

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– 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

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SETTING UP THE PROBLEM

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• 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

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SETTING UP THE PROBLEM

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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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• Click Solve to find a solution to the problem

EDITING A SOLVER FORECAST

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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

• To set up a Scenario:– Open the worksheet Scenario Data.xls

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• 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

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• 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

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• 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

• Click OK

• 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

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SETTING UP SCENARIOS

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• 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

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• 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

SETTING UP SCENARIOS

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Compare the Scenarios

• Compare each scenario to determine the best solution, such as:

Scenario CostOriginal $15,000Single Contractor Overtime $18,000Two Contractors No Overtime $15,200

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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 Edit

4. Modify the Scenario information, as desired5. Close the Scenario Manager dialog box

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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

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• 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

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CREATING A SCENARIO SUMMARY REPORT