Excel Solver tutorial with step-by-step examples

This tutorial explains how to locate and utilize the Solver add-in within various Excel versions, ranging from 2003 to 365. Step-by-step instructions and practical examples demonstrate Solver's application in optimizing solutions for linear programming and other problem types.

Microsoft Excel boasts numerous helpful functions and tools, but its Solver add-in stands out for its ability to find optimal solutions to complex decision-making problems. This tutorial comprehensively covers Solver's capabilities and provides a detailed guide to its effective use.

• What is Excel Solver?
• Adding Solver to Excel
• Using Excel Solver
• Excel Solver Examples
• Saving and Loading Solver Models
• Excel Solver Algorithms

What is Excel Solver?

Excel Solver is a powerful what-if analysis tool designed for simulating and optimizing various models across business and engineering fields. Primarily used for linear programming (linear optimization), it also handles smooth nonlinear and non-smooth problems (see Excel Solver Algorithms for details). While not a universal solution, Solver proves invaluable for optimization tasks requiring optimal decision-making, such as maximizing ROI, optimizing advertising budgets, creating efficient employee schedules, or minimizing delivery costs.

Adding Solver to Excel

Solver is included in all Excel versions from 2003 onwards, but isn't enabled by default.

To add Solver:

1. In Excel 2010-365, navigate to File > Options. In Excel 2007, click the Microsoft Office button, then Excel Options.
2. Select Add-Ins from the left sidebar. Ensure Excel Add-ins is selected in the Manage box, then click Go.
3. Check the Solver Add-in box in the Add-Ins dialog and click OK.

For Excel 2003, access the Tools menu and click Add-Ins. Check the Solver Add-in box in the Add-Ins available list and click OK. If prompted that Solver isn't installed, click Yes to install it.

Solver Location in Excel

In modern Excel versions, the Solver button resides on the Data tab within the Analysis group:

In Excel 2003, after installation, Solver appears in the Tools menu:

Using Excel Solver

Before using Solver, formulate your model within a worksheet. Let's illustrate with a simple optimization problem: A beauty salon owner needs to purchase $40,000 worth of equipment, paid in 12 monthly installments. The goal is to determine the minimum service cost to cover the equipment cost within 12 months.

The model might look like this:

Here's how to use Solver:

1. Run Solver: On the Data tab, click the Solver button.
2. Define the Problem: The Solver Parameters window appears. Define:
   • Objective cell: The cell containing the formula representing the goal (B7 in this example, calculating the payment term). Set to a target value (12 months).
   • Variable cells: Cells containing variable data (B4 and B5 – projected clients and cost per service).
   • Constraints: Limitations on solutions (B3=40000, B4Add button. Specify relationships (, =, >=), integer constraints (int), binary constraints (bin), or all different constraints (dif).
3. Solve the Problem: Click Solve. Solver finds the optimal solution. In the Solver Results dialog, select Keep Solver Solution and click OK. The solution (minimum cost per service) appears in the worksheet. Generate reports for detailed results.

Excel Solver Examples

This section provides additional examples: a magic square puzzle and a linear programming problem.

Saving and Loading Excel Solver Scenarios

Solver allows saving and loading scenarios to reuse or compare different solutions. Save a scenario by clicking Load/Save in the Solver Parameters window, selecting the cells to save to, and clicking Save. Load a saved scenario by selecting the saved cells and clicking Load then Replace.

Excel Solver Algorithms

Solver offers three solving methods:

• GRG Nonlinear: For smooth nonlinear problems.
• LP Simplex: For linear programming problems.
• Evolutionary: For non-smooth problems.

Configure options using the Options button in the Solver Parameters dialog.

Conclusion

Excel Solver is a powerful tool for optimization. This tutorial provides a foundation for leveraging its capabilities to solve complex decision-making problems. A practice workbook is available for download (link provided in original text).

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