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Decision Analysis Tools in Excel

Decision Analysis Tools in Excel. Learning Outcomes. Describe the use of a PivotTable Summarize the tools used when building a PivotTable Compare the functions of Goal Seek and Solver List the advantages of using the Scenario Manager. Introduction.

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Decision Analysis Tools in Excel

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  1. Decision Analysis Tools in Excel

  2. Learning Outcomes • Describe the use of a PivotTable • Summarize the tools used when building a PivotTable • Compare the functions of Goal Seek and Solver • List the advantages of using the Scenario Manager

  3. Introduction • The PivotTable function is an organization and analysis tool that displays fields and records • The Goal Seek function is used to find an unknown value that produces a desired result • The Solver function is used to calculate an optimum solution based on several variables and constraints • The Scenario Manager function is used to create and evaluate a collection of “what-if” scenarios containing multiple input values

  4. 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

  5. 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

  6. 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

  7. 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, PivotTableandPivotChart Report • The PivotTable and PivotChart Wizard — Step 1 of 3 dialog box opens

  8. 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

  9. 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

  10. 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

  11. 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.

  12. Drag the field buttons to the areas to define the layout of the PivotTable • Drag the Region button to the COLUMN area • Drag the Magazine button to the ROW area • Drag the Month button to the PAGE area • Drag the Sale button to the DATA area • Click OK to return to the “PivotTable and PivotChart Wizard — Step 3 of 3” dialog box • Click the Finish button

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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

  18. 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

  19. 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-inand click the box

  20. =D5 =D9+D13 =D4*D5 =G6+G7 =D8*D9 =D12*D13 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)

  21. 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

  22. 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

  23. 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

  24. 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

  25. Editing A Solver Forecast • Click Solve and then OK butoon to find a solution to the problem

  26. 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

  27. 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 Addto 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

  28. 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

  29. 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

  30. Single Contractor Overtime

  31. 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

  32. Modifying A Scenario • Once scenarios have been defined, the data values can be modified • To modify a Scenario: • Choose Tools, Scenarios • Select the desired Scenario name • Choose Edit • Modify the Scenario information, as desired • Close the Scenario Manager dialog box • Compare the Scenarios

  33. 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

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