Excel Review

Excel Review

Global Executive MBAApril 2004

Session goals

Preparation for the coming term− Review and practice essential Excel techniques.

A model building approach− Consider recommendations for approaching Excel

modeling.

ContinuingMaterials, resources, and suggestions for continued review

and/or learning about Excel.

Agenda

Part 1 Critical Excel elements: Follow along on your PC as we review

a set of essential Excel techniques.

Part 2

Model-building advice from the experts: Fuqua’s Decision Science faculty on the fundamentals of Excel model-building.

Apply the approach to model a problem (Oak Products) and use Solver.

Part 3 – On Your OwnPractice exercises. Choose the materials that cover the areas

in which you most need practice.

Handouts & Materials

On the web− Practice files− Documentation− Links to other sources

On Paper− Slides from this

presentation− Basics Review (a description

of basic Excel techniques that accompanies the BasicsReview.xls file)

− Logic Exercises (on paper)

Part 1: Critical Excel elements

Part 1: Critical Excel elementsPart 2: Model building advice from the expertsPart 3: Exercises

Critical Excel Elements

Excel Basics Topics− Organization− Formatting− Editing− Formulas & logical functions− Forecasting− The Data Table− Charting− Online Help

File: BasicsPractice.xls

Practice: Naming Ranges

Ways to name a range− Exercise 1: Insert, Name, Create− Exercise 2: Insert, Name, Define− Exercise 3: Use the “Name Box” on the formula bar

Exercise 4: Display named ranges

Exercise 5: Add a comment to a cell

In the file BasicsPractice.xlssee the worksheet named

Naming Ranges.

Practice: Formatting

Exercise 6: Merge and center Exercise 7: Apply formatting Exercise 8: Apply borders Exercise 9: Create a text box Exercise 10: Use the format painter

In the file BasicsPractice.xlssee the worksheet named

Formatting.

Practice: Basic Editing

Exercise 11: Edit Fill Exercise 12: Excel Custom Lists Exercise 13: Copy & Paste a Formula Exercise 14: Convert Formulas to Values Exercise 15: Transpose Data

In the file BasicsPractice.xlssee the worksheet named

Basic Editing.

Practice: Formulas

Exercise 16: Copy a Formula Using a Relative Reference Exercise 17: Copy a Formula Using an Absolute Reference Exercise 18: Use Built-in Functions Exercise 19: Excel Logical Functions ...and practice on your own Exercise 20: Formula Auditing Tools

In the file BasicsPractice.xlssee the worksheet named

Formulas.

First: The Excel IF Statement

The syntax

=IF(Condition-to-Test, Value-If-True, Value-If-False)

The IF function has three parameters:1. Condition-to-Test2. Value-If-True3. Value-If-False

A key logical Excel function

The Excel IF Statement

=IF(Condition-to-Test, Value-If-True, Value-If-False)

This is a logical statement of some kind that returns either TRUE or FALSE.

Examples:

A1>B5

(C22/C25)<=A1

AND(5<10, 10<20)

OR(5<10, 10>20)

MAX(C77:C80)>600

Additional logical functions that may be embedded as IF function parameters.

The Excel IF Statement

=IF(Condition-to-Test, Value-If-True, Value-If-False)

The value the cell holding the IF statement takes on if the Condition-to-Test evaluates to TRUE.

Examples: 2500 “Bill over due” A15*B15

The Excel IF Statement

=IF(Condition-to-Test, Value-If-True, Value-If-False)

The value the cell holding the IF statement takes on if the Condition-to-Test evaluates to FALSE.

Examples: 2500 “Bill over due” A15*B15

Paper-based Excel logic exercisesto work on by yourself for practice

Answers to all the exercises are at the

end of the document.

FALSE

TRUE

FALSE

An IF statement can contain 7 levels of nesting.

A nested IF statement

See the LogicPractice.xls file.

And – Also see the MoreLogicPractice.xls file.

Practice: Data Tables

Exercise 21: The One-Input Data Table Exercise 22: The Two-Input Data Table

In the file BasicsPractice.xlssee the worksheet named

Data Tables.

Practice: Charting

Exercise 23: Generate a Quick Chart Exercise 24: The Chart Wizard Exercise 25: A Scatter Plot (XY Chart)

In the file BasicsPractice.xlssee the worksheet named

Charting.

Part 2: Model building advice from the experts

Part 1: Critical Excel elementsPart 2: Model building advice from the expertsPart 3: Exercises

On Model-Building: Expert advice

Handout− Excel Design & Audit Tips

Model components− Understand the components

present in most spreadsheet models.

Checklist− Make those components part

of a checklist. Use the checklist items to:

− Organize new models.− Improve existing models.

Five item modeling checklist

1. Identify Known Values− The givens; can’t be modified.− (Do you need more information?)

2. Identify Decision VariablesThe quantities you control.You’ll manipulate these items to find an optimal model

solution.

3. Determine the OutputsWhat you want to solve, show, find, maximize or

minimize.

4. Be aware of any ConstraintsLimits to inputs or outputs. Tradeoffs.

5. Build Relationships into the Model− Relationships between known values and variables,

expressed in formulas.

A review of model building & Solver

File: OakProductsStart.xls

Solver

Oak Products: Overview

Oak Products − A small company that manufactures chairs. − The company has six chair models.

Each chair model− Requires a particular mix of components.

August is a slow month− Because August is traditionally a vacation month, only the parts

already on hand in the factory can be used for August production.− Oak Products makes 40 of each model chair in August.

Question

Might a different product mix be more profitable?

To find out...

Data we need− the components each model requires− how many of each component are on hand − how much profit each model generates

Then− Analyze the data to determine the most profitable product mix,

accounting for constraints.

Model Checklist

Objective− maximize August profit

Known Values− profit per chair, parts-on-hand, parts required

Constraints− limited parts on hand, parts requirements

Decision variables− how many of each model to make

To build the model

Three stages:Part 1: Initial arranging of the data. Add any known values.Part 2: Build formulas to express data relationships.Part 3: Use the model to find the best answer.

Using the model to maximize total profit

40 53 40 4075 5 28 37

…with guesswork …with Solver

Identify for Solver

Target cell − Total Profit

Changing cells (or decision variables)− Quantity of each chair to produce

Constraints− No “negative production”− Use only inventory on hand

Part 3: Exercises

Part 1: Critical Excel elementsPart 2: Model building advice from the expertsPart 3: Exercises

Exercises on Your Own

Use the materials on the GEMBA Excel Review site to practice Excel techniques with which you need practice.

http://faculty.fuqua.duke.edu/~pecklund/GEMBA/index.htm

End