Excel Scenario Manager - A Powerful What-if Analysis Tool

Excel What-if Analysis is a powerful tool that allows users to explore various outcomes by changing input values in formulas and observing the corresponding results. Among the several What-if Analysis tools in Excel, the Scenario Manager stands out as an effective way to create and compare different scenarios without the need to duplicate data. This article will delve into the Scenario Manager feature and demonstrate its usage in a practical example.

What is Excel Scenario Manager?

The Scenario Manager is a part of Excel's What-if Analysis tools. It allows users to define and save multiple sets of values, called scenarios, which can be automatically substituted into specified cells on a worksheet. Each scenario represents a particular situation or combination of input values, enabling users to compare different outcomes easily.

Creating Scenarios with Excel Scenario Manager

Let's understand how to use the Scenario Manager with the help of an example. Imagine you run an IT company with employees categorized into three bands: Band A, Band B, and Band C. Each band has different compensations, basic pay, and HRAs. Instead of creating separate tables for each band, the Scenario Manager will help us create scenarios to compare and visualize the data efficiently.

Example Scenario: Band C Employees

Consider the table below, which contains details for Band C employees. Cells B8, B16, and B18 include mathematical formulas that calculate "Compensation from Company," "Maintenance Bill Per Employee," and "Total Expense to Company," respectively.

To use the Scenario Manager, follow these steps:

1. Select the cells containing numerical data (exclude cells with formulas).

2. Go to the "Data" option in the toolbar and choose "What-if Analysis" from the "Forecast" Ribbon.

3. A dialog box will appear with empty scenarios. Click the "Add" option to create a new scenario.

4. Name the scenario (e.g., "Band C") and press "OK."

5. A new dialog box will display the cell addresses and values for Band C, as shown in the image.

Creating Scenarios for Band B and Band A Employees

To create scenarios for Band B and Band A employees, repeat the same process as above:

1. Click "Add" to add a new scenario for Band B.

2. Enter the values for Band B employees and click "OK."

3. Click "Add" again to create a new scenario for Band A.

4. Enter the values for Band A employees and click "OK."

Now you have three different scenarios - Band A, Band B, and Band C.

Generating a Scenario Summary

Excel's Scenario Manager also allows you to generate a scenario summary. The summary provides an overview of all three scenarios side by side. To create a summary:

1. Click on the "Summary" option in the Scenario Manager dialog box.

2. Select "Scenario Summary" and press "OK."

A new sheet will be created with a comprehensive summary of all three scenarios, as shown below:

Conclusion

Excel's Scenario Manager is a valuable feature in What-if Analysis that simplifies the process of creating and comparing different scenarios without duplicating data. By defining various sets of values and using the Scenario Manager, users can quickly assess the impact of changes on formulas and visualize multiple outcomes. Whether you are analyzing budget scenarios, loan options, or any other multi-variable analysis, the Scenario Manager proves to be a time-saving and efficient tool.

Remember, Excel also offers other What-if Analysis tools like Goal Seek and Data Tables to tackle different types of scenarios, allowing users to explore even more possibilities in their data analysis.

So, the next time you need to compare different scenarios in Excel, turn to the Scenario Manager, and unleash its potential in simplifying your What-if Analysis!

Stay tuned for next feature in What-if-Analysis are "Goal-Seek" and "Data Tables"

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