BUSINESS
SOLVING
EXCEL
PROBLEM
WITH MS-
TOPIC 1: SUBTOTAL
Purpose: to summarize a list or a database within a list/ to SLICE AND DICE
DATA within a list.
Techniques: Subtotal
Exercise: Calculate (Dollars) revenue and (Units) cost sold by Region. Who is the
strongest sales representative? What is the best-selling product?
Trans
Number
Name
Date
Product
Units
Dollars
10
Betsy
07-08-06
lip gloss
24
$
73.50
east
11
Ashley
29-11-04
mascara
43
$
130.84
east
15
Zaret
20-09-06
foundation -8
$
(21.99)
east
16
Emilee
12-04-04
mascara
45
$
137.39
east
45
Emilee
20-09-06
lip gloss
2
$
7.85
east
46
Ashley
09-08-05
mascara
93
$
280.69
east
58
Cristina 12-04-04
foundation 34
$
104.09
east
60
Jen
27-10-04
mascara
89
$
269.09
east
69
Cristina 23-01-05
eye liner
73
$
221.41
east
77
Cristina 15-01-04
mascara
27
$
83.29
east
81
Jen
10-01-06
lip gloss
69
$
208.69
east
86
Jen
09-08-05
eye liner
-2
$
(4.24)
east
87
Emilee
31-08-05
eye liner
5
$
17.03
east
98
Jen
12-04-04
lip gloss
92
$
277.54
east
Location
TOPIC 2: PIVOT TABLE
Purpose: to analyze, or “slice and dice” data to gain important business insights.
Techniques: Pivot Table
Exercise: Determine the following:
Year
- Total revenue for each year at each store (two-dimensional Pivot
Table)
- Total unit for each product in each month for each year (threedimensional Pivot Table)
Month
Store
Group
Product Units
Revenue
2007
August
south
milk
low fat
805
$ 3,187.80
2007
March
south
ice cream
Edies
992
$ 3,412.48
2007
January
east
milk
skim
712
$ 1,808.48
2006
March
north
ice cream
Edies
904
$ 2,260.00
2006
January
south
ice cream
Edies
647
$ 2,076.87
2005
September west
fruit
plums
739
$ 1,707.09
2006
March
east
milk
low fat
974
$ 2,181.76
2007
June
north
fruit
apples
615
$ 1,894.20
2007
July
west
fruit
cherries
714
$ 1,856.40
2005
June
west
ice cream
Edies
528
$ 2,064.48
TOPIC 3: CORRELATION
Purpose: to summarize relationships. A correlation near +1, indicating that two
variables have a strong positive linear relationship. A correlation near 0,
indicating that two variables have a weak linear relationship.
Techniques: Correlation
Exercise: Find the correlations between each pair of the three products.
Laser Printers
Cartridges School Supplies
$
$
$
$
$
$
$
$
$
$
$
$
$
$
17,291.00
13,734.00
18,802.00
12,171.00
16,402.00
19,904.00
14,023.00
17,513.00
17,847.00
12,718.00
12,292.00
11,846.00
17,088.00
13,523.00
4,379.00
2,258.00
4,206.00
2,137.00
3,775.00
4,781.00
1,991.00
2,663.00
4,451.00
1,648.00
2,342.00
2,646.00
3,216.00
2,184.00
$ 3,618.00
$ 3,514.00
$ 3,587.00
$ 3,007.00
$ 3,850.00
$ 3,675.00
$ 3,120.00
$ 3,345.00
$ 2,045.00
$ 3,292.00
$ 3,405.00
$ 2,799.00
$ 2,417.00
$ 2,405.00
TOPIC 4: GOAL SEEK
Purpose: to compute a value for a worksheet input that makes the value of a given
formula match the goal you specify.
For a given UnitPrice, determine the QuantitySold to yield a given Sales. Using
the
exact
function
Sales=product(QuantitySold,UnitPrice)
Exercise: For a given price, how many glasses of lemonade does a lemonade store
need to sell per year to break even?
Techniques: Use Goal Seek
Remark: Enter any number in cell D2
TOPIC 5: SENSITIVITY ANALYSIS
Purpose: to determine how changing one/ or two inputs will change any number of/
or a single output.
I’m thinking of starting a store in the local mall to sell gourmet lemonade. Before
opening the store, I’m curious about how my profit, revenue, and variable costs will
depend on the price I charge and the unit cost.
- One-way data table
Suppose that I want to know how changes in price (for example, from $1.00 through
$4.00 in $0.25 increments) affect annual profit, revenue, and variable cost. Because
I’m changing only one input, a one-way data table will solve the problem.
- Two-way data table
Suppose I want to determine how annual profit varies as price varies from $1.50
through $5.00 (in $0.25 increments) and unit cost varies from $0.30 through $0.60 (in
$0.05 increments). Because here I’m changing two inputs, I need a two-way data
table.
TOPIC 6: REGRESSION ANALYSIS
Type of the model: If the exact form of the relationship is not fully known but we
can control or accurately estimate the inputs
Techniques: Use Regression to build a model
Remark
When running a regression, each independent variable has a p-value between 0 and 1.
Any independent variable with a p-value of less than or equal to 0.15 is considered to
be useful for predicting the dependent variable.
Exercise
The following Data worksheet contains the cost of running a plant over 19 months as
well as the number of units of product A, Product B, Product C produced during each
month.
Find the best forecast for monthly operating cost that has the form
TOPIC 7: OPTIMIZATION
Purpose: to find the best way to do something/ to find the values of certain cells in a
worksheet that optimizes or minimizes a certain objective.
Type of the model: If we know the exact form of the relationship
Techniques: Excel solver
Exercise
TOPIC 8: MONTE CARLO SIMULATION
Purpose: to accurately estimate the probabilities of uncertain events.
Type of model: If the inputs or the behaviour of the system itself exhibits stochastic
(random) behaviour
Technique: Use simulation to build a model
Exercise: Suppose that the demand for a Valentine’s “Day card is governed by the
following discrete random variable:
Demand
Probability
10,000
0.10
20,000
0.20
40,000
0.3
60,000
0.25
The greeting card sells for $4.00, and the variable cost of producing each card is
$1.50. Leftover cards must be disposed of at a cost of $0.20 per card. How many
cards should be printed?
TOPIC 9: LOOKUP FUNCTIONS
Compute the tax level for any income level.
Suppose that the tax rate depends on income, as shown in the following table: