CTS second response

Ahmad:

Hello John. What-if analysis allows you to run different sets of values using different formulas to get different results. The process involves changing values in excel cells to examine how the change in values will affect the end result in the worksheet. Excel comes with three What-if analysis tools which include data tables, goal seek and scenarios (Herodotou & Babu, 2011). To determine the end result, scenarios and data tables use sets of input values. Data tables only work with a single or two values, although it can accept many values to work with the one or two variables (Herodotou & Babu, 2011). Scenario accepts multiple variables, but only accommodates up to thirty-two values.  Goal seek is the most different of the three tools because it takes the end result to determine the possible input values that resulted in the final result. The company can use what-if analysis to project what the company's operations would look like in a financial model under different sets of inputs. It can be used to predict the outcome, not by creating an entirely new individual model but through the use of different variables. For instance, you can apply optimistic inputs to compare what the revenues will look like against pessimistic inputs. It can also help in business planning. With a what-if analysis, you will be able to make informed decisions. You will also be able to predict the outcome of your decisions in a better way since you have compared the end results.

            Scenario works with values and variables to show the different result in the end. You can compare the best-case scenario and the worst-case scenario using it. The changing cells and result cells will show the different results of each scenario (Herodotou & Babu, 2011). Goal seek reverses the result to show the variable that was used to show the end result. It can be used when looking for the input value required by the formula to produce the end result. Data tables mainly show a range of possibilities from using one or two variables on the same formula. Solver is used to getting the maximum or minimum value in cells by changing the variables in other cells.

 

Reference

Herodotou, H., & Babu, S. (2011). Profiling, what-if analysis, and cost-based optimization of mapreduce programs. Proceedings of the VLDB Endowment, 4(11), 1111-1122.