Scenario Manager is a what-if analysis tool available in excelA What-if Analysis Tool Available In ExcelWhat-If Analysis in Excel is a tool for creating various models, scenarios, and data tables. It enables one to examine how a change in values influences the outcomes in the sheet. The three components of What-If analysis are Scenario Manager, Goal Seek in Excel, and Data Table in Excel.read more which works on different scenarios provided to it, it uses a group of ranges which impact on a certain output and can be used for making different scenarios such as well bad and medium depending on the values present in the range which impact the result.
What is Scenario Manager in Excel?
- Scenario manager in excel is a part of three what-if-analysis tools in excel, which are built-in in, excel. In simple terms, you can see the impact of changing input values without changing the actual data. Like Data Table in excelData Table In ExcelA data table in excel is a type of what-if analysis tool that allows you to compare variables and see how they impact the result and overall data. It can be found under the data tab in the what-if analysis section.read more, you now input values that must change to achieve a specific goal.
- Scenario Manager in Excel allows you to change or substitute input values for multiple cells (maximum up to 32). Therefore, you can view the results of different input values or different scenarios at the same time.
- For Example: What if I cut down my monthly traveling expenses? How much will I save? Here scenarios can be stored so that you can apply them with just a click on the mouse.
How to Use Scenario Manager Analysis Tool in Excel?
Scenario Manager is very simple and easy to use in excel. Let us understand the working of the Scenario Manager tool in Excel with some examples.
Scenario Manager in Excel – Example #1
A simple example could be your monthly family budget. You will spend on food, travel, entertainment, clothes, etc.… and see how these affect your overall budget.
Step 1: Create a below table shows your list of expenses and income sources.
- In cell B5, you have total income.
- In cell B17, you have total expenses for the month.
- In cell B19, total money left.
You are ending up with only 5,550 after all the expenses. So, you need to cut down your cost to save more for the future…
Step 2: From the top of Excel, click the Data menu > On the Data menu, locate the Data Tools panel > Click on the what-if-Analysis item and select the Scenario Manager in excel from the menu.
Step 3: When you click on the Scenario Manager below, the dialogue box will open.
Step 4: You need to create a new scenario. So click on the Add button. Then you will get the below dialogue box.
By default, it shows the cell C10, which means that it is the currently active cell. First, type the Scenario Name in the box as the Actual Budget.
Now, you need to enter which cells your excel sheet will be changing. In this first scenario, nothing will be changing because this is my actual budget for the month. Still, we need to specify the cells will be changing.
Now try to reduce your Food expenses and Clothes expenses. These are in the cells B15 & B13, respectively. Now your add scenario dialogue box should look like this.
Click, OK, and Excel will ask you for some values. Since we do not want any changes to this scenario, just click OK.
Now, you will be taken back to the Scenario Manager Box. Now the window will look like this.
Now, one scenario is done and dusted. Create a second scenario, and this where you need to make changes to your Food & Clothes expenses.
Click the Add button one more time and give a scenario name as “Plan 2”. Changing the cell will be B15 & B13 (Food & Cloth expenses).
Now, below Scenario Values dialogue box opens again. This time, we do want to change the values. Enter the same ones as in the image below:
These are the new values for our new scenario, Plan 2. Click OK, and now you are back to the Scenario Manager window. Now we already have two scenarios named after Actual Budget & Plan 2.
Click the Add button one more time and give a scenario name as “Plan 3”. Changing the cell will be B15 & B13 (Food & Cloth expenses).
Now, below Scenario Values dialogue box opens again. This time, we do want to change the values. Enter the same ones as in the image below:
These are the new values for our new scenario, Plan 3. Click OK, and now you are back to the Scenario Manager window. Now you have three scenarios named after Actual Budget, Plan 2, and Plan 3.
As you can see, we have our Actual Budget, Plan 1 and Plan 2. With Plan 2 selected, click the Show button at the bottom. The values in your excel sheet will change, and the new budget will be calculated. The image below shows what it looks like.
Click on the Actual Budget, then click on the Show button to see the differences. Initial values will be displayed.
Do the same for Plan 2 to look at the changes.
So Scenario Manager in Excel allows you to set different values and allows you to identify the significant changes from them.
How to Create a Summary Report in Excel?
After we are done with adding different scenarios, we can create a summary report in excel from this scenario manager in excel. To create a summary report in excel, follow the below steps.
- Click on the Data tab from the Excel menu bar.
- Click on What-If-Analysis.
- Under the what-if-analysis, click Scenario Manager in Excel.
- Now click on Summary.
- Click ok to create the summary report in excel.
- It will create the summary in the new sheet, as shown in the below image.
- It shows the change in savings in three different scenarios. In the first scenario, the savings was 5,550. In the second scenario, savings are increased to 20,550 due to cost cut down in Food & Clothes section, and finally, the third scenario shows the other scenario.
- All right, now we exercised a simple Family Budget Planner. It looks good enough to understand. Perhaps this is enough to convince your family to change their lifestyle.
- Scenario manager in Excel is a great tool when you need to do sensitivity analysisSensitivity AnalysisSensitivity analysis is a type of analysis that is based on what-if analysis, which examines how independent factors influence the dependent aspect and predicts the outcome when an analysis is performed under certain conditions.read more. You can create the summary report in excel instantly to compare one plan with the other and decide the best alternative plan to get a better outcome.
Scenario Manager in Excel Example #2: Take the below data and create new scenarios.
Take the below data table and create new Scenarios.
- “If the Operating Cost Reduces by 10%”
- “If the Operating Cost Reduces by 15%”
- “If the Unit PriceUnit PriceUnit Price is a measurement used for indicating the price of particular goods or services to be exchanged with customers or consumers for money. It includes fixed costs, variable costs, overheads, direct labour, and a profit margin for the organization.read more increase by 5 and all others remain the same.”
Formula used in cell B4 is =B2*B3 & in cell B11 is = B4 – B9
In addition, your scenarios will look like the below one.
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This has been a guide to what is the Scenario Manager in Excel. Here we walk through examples on how to use Scenario Manager in excel and create Summary Report along with downloadable excel templates. You may also look at these useful functions in excel –
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