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Week 4 - Lecture Note

The document discusses using Excel tools like Goal Seek, Solver, and Scenario Manager to analyze data and solve problems. It provides examples of using each tool to find optimal solutions under certain constraints like revenue targets, loan repayment periods, and profit maximization.

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Sachini dilshani
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
6 views

Week 4 - Lecture Note

The document discusses using Excel tools like Goal Seek, Solver, and Scenario Manager to analyze data and solve problems. It provides examples of using each tool to find optimal solutions under certain constraints like revenue targets, loan repayment periods, and profit maximization.

Uploaded by

Sachini dilshani
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

ACF 3104

Decision Support Exercises with Excel

Many Excel users input data into a worksheet, use simple functions or formulas to calculate results, and

then report those results to someone else. Although this is a perfectly legitimate use of Excel, it

basically turns Excel into a calculator.

When you need to do more than just type data into a worksheet, you can use special Excel features to

analyze your data and solve complex problems by employing variables and constraints. Goal Seek and

Solver are two great tools included with Excel that you can use to analyze data and provide answers to

simple or even fairly complex problems.

1. Goal Seek

• Goal Seek is used to resolve a problem in which the desired result is known, but the value of one

of the variables is not known.

• This option finds the closest solution possible without exceeding the target.

• When using Goal Seek, the cell that will not change has to be specified. Also, it is necessary to

choose which cell is to change and to specify what value is being sought.

Activity 01 – In Excel Workbook – Find Goal Seek – I Worksheet

If a producer wants to identify the amount of products that he needs to sell for a given price
(Rs. 20) in order to receive a revenue of Rs. 250,000:

Price per unit Rs. 20


Number of units
Revenue

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Activity 02 – In Excel Workbook – Goal Seek – II Worksheet

If the customer agreed to pay Rs. 30,000 monthly,for how many months he needs to repay the
loan of Rs. 3,400,000 at a rate of 8%?

2. Solver

• Goal Seek is an efficient feature for helping you reach a particular goal, but it deals with only a

single variable. For most businesses, the variables are much more complex.

• For problems like these, you can use Solver, an add-in program that comes with Excel. This

powerful analysis tool uses multiple changing variables and constraints to find the optimal

solution to solve a problem.

• It is an add-in program that searches for the best solution to a problem with several variables.

• It is used to find the best way to allocate resources.

• It requires three parameters:

o Target cell typically contains a formula that is directly or indirectly based on the

adjustable cells and constraints.

o Adjustable cells are the cells whose values are adjusted until the constraints are

satisfied.

o Constraints specify the restrictions.

• Solver is a separate program that must be

installed or added in to Excel.

MS Excel → File → Options → Add-Ins

→ Excel Add-Ins → Go → Tick the Solver

Add In (In the New Dialog Box) → Click

OK

Can find the Solver under the Data Ribbon

as shown in the pictures below.

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Activity 03 – In Excel Workbook – Find Solver I Worksheet

The Devon bakers sell different types of buns for different prices. Following are the daily sales of

buns by the bakery. Find the total revenue of the bakery. If the maximum amount of buns produces

by the bakery has given as follows, find the optimum number of products the bakery should sell from

each category to achieve given total revenue.

Product: Sausage Bun


Price of sausage bun $ 5.00 Total Revenue
Number of products 150
sold
Subtotal

Product: Egg Bun

Price of Egg bun $ 6.00


Number of products sold 200
Subtotal
Page 3 of 5
Product: Cheese Bun

Price of cheese bun $ 2.00


Number of products 150
Subtotal

Sales Record

Max Sausage Bun 150


Max Egg Bun 200
Max Cheese Bun 150

Constraints

Max Sausage Bun 200


Max Egg Bun 250
Max Cheese Bun 175

Activity 04 – In Excel Workbook – Find Solver II Worksheet

The Lumala Cycle Company sells three types of products as given in the excel sheet. With the

constraints of Capital and Storage, Find the maximum profit the company can earn by adjusting their

order size.

3. Scenario Manager

• Scenario Manager enables you to specify multiple sets of assumptions, called scenarios, to quickly

see the results of any given Scenario.

• It represents different sets of what-if conditions to be considered in assessing the outcome of

spreadsheet models.

Activity 05 – In Excel Workbook – Find Scenario I Worksheet

Assume you own a book store and have 100 books in storage. You sell a certain % for the highest price

of Rs. 50 and a certain % for the lower price of Rs. 20. Create different scenarios, if you sell 50% or

more books for highest price and find the total profit that you can earn.

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Activity 06 – In Excel Workbook – Find Scenario II Worksheet

A manufacturer produces three products named Regular, Budget, and Premium He is selling these three
products for prices Rs. 10, Rs. 25, and Rs. 30 respectively. He wants to identify the possible changes
of total revenue based on the number of products he sells in each product. Consider following scenarios.

Scenario Regular Budget Premium


Worst 50 100 75
Ideal 175 250 150
OK 100 150 120

XYZ Manufactures (Pvt.) Ltd

Product Regular
Price of Product A Rs. 10
Number of products sold 150
Subtotal

Product Budget
Price of Product B Rs. 25
Number of products sold 200
Subtotal

Product Premium
Price of Product C Rs. 30
Number of products sold 125
Subtotal

Sales Record
Product A 155
Product A 210
Product A 145

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