Technology

What is Excel Solver in Excel? A Complete Guide to Using Solver in Excel

Excel Solver is a versatile tool that can help businesses optimize their problem-solving processes. It enables users to define and solve complex models, aiding in the identification and selection of optimal solutions. By leveraging Excel Solver, businesses can gain valuable insights, enhance efficiency, and make data-driven decisions that drive success.

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6 May, 2024

Excel Solver: A Comprehensive Guide

Knowing How to Use the Excel Solver Add-in Will Save You Time

1. What is Excel Solver?

Excel Solver is an add-in tool integrated within Microsoft Excel that is used to solve optimization problems and find the optimal solution to complex mathematical problems. Built upon optimization algorithms, Excel Solver assists users in finding the optimal value of an objective function based on one or more defined constraints.

Specifically, Excel Solver has the capability to find optimal solutions for problems such as cost optimization, production planning, scheduling, and many other applications. Users are able to define the decision variables and related constraints, then use Excel Solver to calculate the optimal values for these variables.

Excel Solver is versatile and robust, allowing users to customize the conditions and constraints to their specific needs. This makes Excel Solver a useful tool not only for those in business but also for researchers, educators, and students in solving complex problems.

2. Steps to Use Solver for Solving Problems in Excel

Step 1: Define the Objective Function

First, you need to formulate the objective function that you want to optimize. The objective function can be a formula calculating cost, profit, expense, or any other desired outcome.

Step 2: Set Up the Constraints

Establish the constraints for the variables in your problem, limiting the range of values that the variables can achieve.

Step 3: Organize Data in the Excel Spreadsheet

Input the relevant information related to the objective function, variables, and constraints into the Excel spreadsheet. Make sure that you can easily change the values to test outcomes.

Step 4: Use Solver to Find the Optimal Solution

Navigate to the Data tab in the toolbar > select Solver > input the objective function, changing variable, and corresponding constraints > select the necessary options and click Solve to begin the optimization process. Upon completion, Solver will find the optimal value for the variable that satisfies the constraints set.

3. Instructions for Adding Solver to Excel

Step 1: In the File tab > select Options.

Step 2: In the newly appeared Excel Options window > click Add-ins > select Solver Add-in and click Go.

Step 3: Check the box for Solver Add-in > click OK.

Step 4: Solver has now appeared in the Data tab, located in the Analyze group.

4. Practical Applications of Using Excel Solver

For every problem, Solver will produce detailed results in the shortest amount of time. You can change the requirements without having to re-enter data.

4.1. Step 1: Running Excel Solver

The problem is as follows: A store owner wants to create a plan for a new service. A new device worth $40,000 needs to be paid off within 12 months. The goal is to optimize service costs to recover capital as quickly as possible within the required timeframe.

4.2. Step 2: Define the Problem

First, the Solver Parameters window will appear, where you will need to define three elements: Objective cells, Variable cells, and Constraint cells.

Excel Solver will search for the optimal value for the equation in the Objective cells by changing the values in the Variable cells and adhering to the limits defined in the Constraint cells.

Objective Cells

The Objective Cells contain the equations representing the objective of the problem. This equation can be to minimize, maximize, or achieve a specific value. For instance, in this case, the objective cell is defined as cell B7, and it represents the payback period calculated by the formula: =B3/(B4*B5), resulting in 12.

Variable Cells

These are cells that contain data that can be changed to achieve the objective. Excel Solver can define up to 200 variable cells. In this example, there are a few cells that you can change the values of:

The number of projected customers per month (cell B4) must be less than or equal to 50.
The cost of each service (cell B5).

Constraint Cells

The Constraints are conditions that must be satisfied. To add Constraints, follow these steps:

Step 1: Click Add on the right-hand side of Subject to the Constraints.
Step 2: In Add Constraint > input the conditions.
Step 3: Select Add to add.

Step 4: Input any other conditions as needed.

Step 5: Once all the constraints are filled in, click OK to return.

Solver allows you to define the following relationships between the referenced cell and the constraint:

Less than or equal to (<=)
Equal to (=)
Greater than or equal to (>=)

Alternatively, you can set these relationships by selecting a cell in the referenced cells, then choosing one of the corresponding signs.

Additionally:

Integer: If the referenced cell must be an integer > select int.
Different values: In the event that each cell in the referenced range must be different > select dif.
Binary: If you want to restrict a referenced cell to be either 0 or 1 > select bin.

To edit or delete an existing constraint > select Solver Parameters > click again on Constraint. To modify the constraint > select Change. To delete the constraint > select Delete.

B3 = 40000 – The cost of the new device is $40,000.
B4 <= 50 – The projected number of patients per month

Frequently asked questions

Excel Solver is an add-in tool for Microsoft Excel, designed to solve optimization problems and complex mathematical equations. It assists users in finding optimal solutions by defining an objective function, setting constraints, and then calculating the best outcome within those parameters.

Excel Solver optimizes problems by defining an objective function, establishing constraints, organizing data in an Excel spreadsheet, and then utilizing the Solver function to find the best solution within those constraints.

To add the Solver function, go to the ‘File’ tab, select ‘Options’, click on ‘Add-ins’, choose ‘Solver Add-in’ and hit ‘Go’. Then, check the box for ‘Solver Add-in’ and click ‘OK’. The Solver function will be accessible from the ‘Data’ tab, within the ‘Analyze’ group.

Excel Solver is valuable for a range of optimization problems, especially in business and research contexts. For instance, a store owner can use it to optimize costs for a new service, aiding in quick capital recovery. It’s also useful for production planning, scheduling, and other scenarios where finding optimal solutions is vital.

When defining a problem, use the ‘Solver Parameters’ window to specify three elements: Objective Cells, Variable Cells, and Constraint Cells. Objective Cells contain equations to optimize, Variable Cells are data that can be changed to meet the objective, and Constraint Cells represent conditions that must be satisfied.

Objective Cells in Excel Solver hold equations that represent the problem’s objective. This could be minimizing cost, maximizing profit, or achieving a specific value. For example, if minimizing the payback period for an investment, the objective cell would contain the formula for calculating that period.

Variable Cells contain data that can be adjusted to meet the desired objective. In a scenario involving service cost optimization, the number of projected customers and the cost per service would be variable cells. Excel Solver can manage up to 200 variable cells.

Constraint Cells represent conditions that must be met for the problem. To add constraints, click ‘Add’ next to ‘Subject to the Constraints’. Input conditions such as limiting the range of projected customers. You can also set relationships between cells: less than or equal to, equal to, or greater than or equal to.