IT Skill Module

Data Analysis using Spreadsheets

MS-Excel Session 4 -
What-If Analysis

CCIT4085
Information Technology Fundamentals
Semester 2, 2024-25
Table of Contents
TABLE OF CONTENTS .............................................................................................................................. I

1 EXPLORING VARIOUS SCENARIOS ......................................................................................................... 2

2 PERFORMING GOAL SEEKING ................................................................................................................ 7

3 USING SOLVER FOR COMPLEX MODELS ................................................................................................. 9

4 LAB EXERCISES (FOR SUBMISSION) ...................................................................................................... 18

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1 Exploring Various Scenarios
Excel enables you to create and save sets of input values that produce different results as scenarios
using Excel's Scenario Manager. A scenario consists of a group of input values in a worksheet to which
you assign a name such as Best Case, Worst Case, Most Likely Case, and so on.

1. Open spreadsheet Excel_Sess4_1.xlsx.

(NOTE : Names have been assigned to cells in this worksheet, and can be found by using
“Formula” tab > “Name Manager” button.)

2. Select the three cells in the Assumptions column (i.e. holding down the CTRL key and click the
three cells one by one.).

For MAC Users

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3. Open the Data ribbon menu, and select Scenario Manager under What-If Analysis button.

4. Click open the Scenario Manager dialog box and then click Add.

5. The Add Scenario dialog box is opened. Enter Most Likely for Scenario Name. Check that the
changing cells are the three cells highlighted under the Assumptions column, i.e. cells H4, H5 and
H7. Then click OK to open the Scenario Values dialog box.

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6. Notice that the scenario values are those in the Assumptions column. Click OK to save this
scenario.

7. Use the Add button in the Scenario Manager to add two more scenarios.
• Worst Case: 0.02 in Sales_Growth, 0.3 in COGS, 0.3 in Expenses
• Best Case: 0.1 in Sales_Growth, 0.05 in COGS, 0.1 in Expenses

8. Highlight the Best Case scenario and click Show button.

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9. The results should be as follows. Notice the values in the Assumptions column and the changes
in the Income row. Try choosing different scenarios and observe the results.

10. Change the Assumptions values as follows, and reopen the Scenario Manager dialog box.

11. Click the Summary button to open the Scenario Summary dialog box.

12. In the Result Cells box, set the range to be C8:G8. Then click OK.

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13. A Scenario Summary worksheet will be created in front of the Sales Forecast worksheet. Notice
the different scenarios are all present in this summary.

14. Self-Learning – What is the difference between Scenario Summary and Scenario PivotTable
Report.

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2 Performing Goal Seeking
When you only need to find the value for a single variable that will give the desired result in a
particular formula, you can perform this simple type of goal seeking with Excel's Goal Seek command.

1. Open spreadsheet Excel_Sess4_2.xlsx.

2. Position the cursor in cell C8 which contains the forecasted income for the first quarter of 2020.
Then click the Goal Seek option under What-If Analysis button.

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3. The Goal Seek dialog box is opened with C8 in the Set Cell. Input 500000 into To Value and set
C4 as the By Changing cell. Then click OK.

4. Notice that the Income for Qtr1 is changed to $500,000, and the Qtr1’s Sales is updated
accordingly. However the chart below is not yet updated. Click OK in the Goal Seek Status dialog
box to confirm the results, or click Cancel to return to original values.

Not Updated

5. After clicking OK, the chart will be updated as follows.

Updated

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3 Using Solver for Complex Models
You would use the Solver to find the best solution when you need to change multiple input values in
your model and you need to impose constraints on these values or the output value.

1. Open spreadsheet Excel_Sess4_3.xlsx.

2. Click the File button in the top menu bar. In the drop-down list, open the Options dialog box.

For MAC Users

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3. Open the Add-ins option. Select Solver Add-in, and make sure that it is ‘Excel Add-ins’ for the
Manage command, then click Go.

4. In the Add-ins dialog box, select ‘Solver Add-in’ and click OK.

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5. Notice that in the Data ribbon menu, the Solver button is added in the Analyse group.

6. Click the Solver button to open the Solver dialog box. Set the following values for parameters:
• Set Objective – set as $G$8
• To: choose Value Of, and set as 650000.
• By Changing Variable Cells: set as $H$5, $H$7
Then click Solve.

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7. Notice that the Total Income is set to $650,000. What else have been changed?

8. In the Solver Results dialog box, choose ‘Keep Solver Solution’ and click Save Scenario.

9. Type ‘Most Likely’ as the Scenario Name in the Save Scenario dialog box, and click OK.

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10. Back to the Solver Results dialog box, choose ‘Restore Original Values’ and click OK.

11. The values are now restored to original. Open Solver Parameters dialog box again, and notice
that the previous settings should be retained. Under Set Objective / To, change from ‘Value of’
to ‘Min’. Then click the Add button to add constraints to some of the values.

12. In the Add Constraint dialog box, set H5 in the Cell Reference, ‘<=’ for the comparison, and 15%
in the Constraint. Then click the Add button.

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13. Add another constraint for the Expenses as below. Then click the OK button.

14. Notice that two constraints have been added in the Solver Parameters dialog box. Then click the
Solve button

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15. Another forecast is created, with the constraints as defined. Click the Save Scenario button.

16. Save this forecast as another scenario, naming it ‘Optimal’.

17. Choose ‘Restore Original Values’ in the Solver Results dialog box. Then open the Scenario
Manager under What-If Analysis. Note that there are two scenarios created.

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18. Select the Optimal scenario and click Show. Then highlight the Sales row together with the
header row below.

19. In the Insert ribbon menu, select the 3-D Pie from the pie chart button.

20. The following 3-D Pie Chart is created. Change the chart title as follows.

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21. Highlight the chart and explore the 3 buttons on the right hand side.

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4 Lab Exercises (for submission)
Open Excel_Sess4_Lab1.xlsx.

1. Calculate the Sales Forecasts for years 2 to 5, the Total column and the Grand Total (using
formulae wherever possible), based on the given Yearly Growth Assumptions. This is the
‘Normal’ scenario.

2. Load the Solver add-in, and create two more scenarios as follows:
• ‘Optimistic’ scenario – the Grand Total is $7,000,000.
• ‘Pessimistic’ scenario – the Grand Total is $5,000,000.

3. Using a suitable chart type, display the Total (years 1-5) Sales Forecast by Product.

Submit the Excel file when finished.

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AI Corner

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