Microsoft Office Tutorials and References
In Depth Information
You can change the economic inputs in four different combinations, R-H, R-L, B-H, B-L, and see the
impact on your net income and cash on hand both for expanding and not expanding. However, you have
another more powerful way to do this. In the next section, you will learn how to tabulate the financial results
of the four possible combinations using an Excel tool called Scenario Manager.
You are now ready to evaluate the four possible outcomes for your DSS model. Because this is a simple,
fouroutcome model, you could have created four different spreadsheets, one for each set of outcomes, and then
transferred the financial information from each spreadsheet to a Summary Report.
In essence, Scenario Manager performs exactly the same task. It runs the model for all the requested
outcomes and presents a tabular summary of the results. This summary is especially useful for reports and
presentations needed by upper managers, financial investors, or in this case, the bank.
To review, the four possible combinations of input values are: R-H (Recession and High Inflation), R-L
(Recession and Low Inflation), B-H (Boom and High Inflation), and B-L (Boom and Low Inflation). You could
consider each combination of inputs a separate scenario. For each of these scenarios, you are interested in
four outputs: Net Income after Taxes for Expansion and No Expansion, and End-of-year Cash on Hand for
Expansion and No Expansion.
Scenario Manager runs each set of combinations and then records the specified outputs as a summary
into a separate worksheet. You can use these summary values as a table of numbers and print it, or you can
copy them into a Microsoft Word document or a PowerPoint presentation. You can also use the data table to
build a chart or graph, which you can put into a report or presentation.
When you define a scenario in Scenario Manager, you name it and identify the input cells and input
values. Then you identify the output cells so Scenario Manager can capture the outputs in a summary sheet.
AT THE KEYBOARD
To start, select the Data tab on the Ribbon. In the Data Tools group, click the What-If Analysis icon, then
click Scenario Manager from the menu that appears (see Figure C-20).
Scenario Manager option in the What-If Analysis menu