TL;DR: Solver and Goal Seek are powerful tools for complex scenario analysis, enabling users to optimize decision-making processes and perform advanced what-if analyses. Goal Seek adjusts a single input variable to achieve a desired output value, while Solver adjusts multiple input variables simultaneously to achieve a specified goal, subject to constraints. By mastering these tools, spreadsheet experts can tackle a wide range of optimization problems and enhance their overall spreadsheet skills.

The Art of Scenario Analysis

Scenario analysis is a powerful technique used by spreadsheet professionals to examine different possible outcomes of complex problems under varying conditions. By leveraging advanced features such as Solver and Goal Seek, you can perform intricate scenario analyses, optimize decision-making processes, and enhance your overall spreadsheet skills. This comprehensive guide will provide expert-level insights, instructions, and examples to help you master complex scenario analysis using Solver and Goal Seek.

Understanding Solver and Goal Seek

Solver and Goal Seek are two built-in tools in spreadsheet applications like Microsoft Excel and Google Sheets that enable users to perform advanced what-if analysis and optimization tasks. These tools allow you to identify optimal solutions to complex problems, given specific constraints and objectives.

Goal Seek is a straightforward tool that adjusts a single input variable to achieve a desired output value. It's particularly useful for finding break-even points, target values, and reverse calculations.

Solver, on the other hand, is a more advanced optimization tool capable of adjusting multiple input variables simultaneously to achieve a specified goal while adhering to certain constraints. Solver is especially useful for linear programming, nonlinear optimization, and integer optimization problems.

Getting Started with Goal Seek

To use Goal Seek in Excel, follow these steps:

  1. Click on the "Data" tab in the ribbon.
  2. Locate the "What-If Analysis" button in the "Forecast" group and click on it.
  3. Select "Goal Seek" from the dropdown menu.

To use Goal Seek in Google Sheets, follow these steps:

  1. Click on the "Extensions" tab in the menu.
  2. Locate the "Goal Seek" option and click on it. (Note: You may need to install the Goal Seek add-on if it's not already available.)

Once you've accessed the Goal Seek tool, input the following parameters:

  • Set cell: The cell containing the formula or value you want to achieve a specific goal.
  • To value: The target value you want to achieve.
  • By changing cell: The input cell you want to adjust to reach the target value.

After entering the parameters, click on "OK" or "Start" to run Goal Seek. The tool will adjust the input cell to find the value that achieves the desired output.

Delving into Solver

To access Solver in Excel, you must first enable the add-in. Follow these steps:

  1. Click on the "File" tab, and select "Options."
  2. Click on "Add-Ins" in the left pane, and then select "Excel Add-ins" from the "Manage" dropdown at the bottom.
  3. Click "Go," and check the box next to "Solver Add-in." Click "OK."

In Google Sheets, Solver is available as an add-on. To install it, click on "Extensions" > "Add-ons" > "Get add-ons," and search for "Solver." Click on the add-on and select "Install."

Once you've enabled Solver, follow these steps to use it in Excel:

  1. Click on the "Data" tab in the ribbon.
  2. Locate the "Solver" button in the "Analysis" group and click on it.

In Google Sheets, click on "Extensions" > "Solver" > "Start" to open the Solver add-on.

To perform a Solver analysis, input the following parameters:

  • Set Objective: The cell containing the formula or value you want to optimize.
  • Equal to: Choose "Max," "Min," or "Value of" to specify the optimization goal.
  • By Changing Variable Cells: The input cells you want to adjust to optimize the objective.
  • Subject to the Constraints: Specify any constraints that must be satisfied during the optimization process.

After entering the parameters, click on "Solve" to run Solver. The tool will adjust the input cells to find the values that optimize the objective, subject to the specified constraints.

Working with Constraints

Constraints play a crucial role in Solver, as they define the limitations and boundaries within which the optimization problem must be solved. Typical constraints include:

  • Upper and lower bounds for input variables.
  • Integer or binary constraints, indicating that a variable must take on a whole number or binary (0 or 1) value.
  • Equality or inequality constraints, specifying relationships between different variables or between a variable and a constant.

To add constraints in Excel's Solver, click on the "Add" button in the Solver Parameters dialog box. In Google Sheets, click on "Add constraint" in the Solver sidebar. You can input multiple constraints to define complex optimization problems.

Interpreting Solver Results

Once Solver has completed its calculations, it will display the optimal solution in the input cells, and a Solver Results dialog box will appear. This dialog box provides information on the objective value and the values of the input variables that optimize the problem. Additionally, you can view detailed information about the solution process, sensitivity analysis, and other diagnostic data.

If Solver cannot find a feasible solution that satisfies all constraints or if the problem is unbounded, it will display an appropriate message in the Solver Results dialog box.

Case Study: Portfolio Optimization

To demonstrate the power of Solver and Goal Seek, let's consider a portfolio optimization problem. Assume you're an investment manager responsible for allocating funds among four different investment options: stocks, bonds, real estate, and cash. You want to maximize the portfolio's return while maintaining a certain level of risk.

Using historical data, you've calculated the expected returns, standard deviations (a measure of risk), and correlations between the investment options. With this data, you can build a spreadsheet model that calculates the portfolio's expected return and risk (measured as the standard deviation of the portfolio).

You can then use Goal Seek to find the allocation that achieves a specific target return while minimizing the portfolio's risk. Alternatively, you can use Solver to maximize the portfolio's return, subject to constraints on the maximum acceptable risk and the total allocation (e.g., the sum of allocations must equal 100%).

By leveraging Solver and Goal Seek in this context, you can make more informed investment decisions and better manage the risk-return tradeoff.


Complex scenario analysis with Solver and Goal Seek enables spreadsheet experts to tackle a wide range of optimization and what-if analysis problems. By understanding how to use these tools effectively, you can optimize decision-making processes, enhance your spreadsheet skills, and add significant value to your organization.

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