An optimization problem is one where you have to make the best decision (choose the best investments, minimize your company's costs, find the class schedule with the fewest morning classes, or so on). In optimization models then, the words 'minimize' and 'maximize' come up a lot when articulating an objective.
Download & Install. If using Excel for Mac 2016. /Applications/Microsoft Office 2011/Office/Add-Ins. The Excel Solver is a product developed by Frontline Systems for Microsoft. OpenSolver has no affiliation with, nor is recommended by, Microsoft or Frontline Systems. All trademark terms are the property of their respective owners.
In data science, many of the practices, whether that's artificial intelligence, data mining, or forecasting, are actually just some data prep plus a model-fitting step that's actually an optimization model. We'll start with a little practice with optimization now. Just a taste.
In Excel, optimization problems are solved using an Add-In that ships with Excel called Solver.
On Windows, Solver may be added in by going to File (in Excel 2007 it's the top left Windows button) > Options > Add-ins, and under the Manage drop-down choosing Excel Add-ins and pressing the Go button. Check the Solver Add-In box and press OK.
On Mac, Solver is added by going to Tools then Add-ins and selecting Solver.xlam from the menu.
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A Solver button will appear in the Analysis section of the Data tab in every version.
All right! Now that Solver is installed, here's an optimization problem: You are told you need 2,400 calories a day. What's the fewest number of items you can buy from the snack stand to achieve that? Obviously, you could buy 10 ice cream sandwiches at 240 calories a piece, but is there a way to do it for fewer items than that?
Solver can tell you!
To start, download a copy of the Calories spreadsheet from the book's companion website at www.wiley.com/go/datasmart -- use the download link for chapter 1. Make a copy of the Calories sheet in the Concessions.xlsx Excel workbook, name the sheet Calories-Solver, and clear out everything but the calories table on the copy. If you don't know how to make a copy of a sheet in Excel, you simply right-click the tab you'd like to copy and select the Move or Copy menu.
To get Solver to work, you need to provide it with a range of cells it can set with decisions. In this case, Solver needs to decide how many of each item to buy. So in Column C next to the calorie counts, label the column How many? (or whatever you feel like), and you can allow Solver to store its decisions in this column.
Excel is very capable when you have all of the data you need for your calculations.
But wouldn’t it be nice if it could solve for unknown variables?
With Goal Seek and the Solver add-in, it can. And we’ll show you how. Read on for a full guide on how to solve for a single cell with Goal Seek or a more complicated equation with Solver.
How to Use Goal Seek in Excel
Goal Seek is already built into Excel. It’s under the Data tab, in the What-If Analysis menu:
For this example, we’ll be using a very simple set of numbers. We have three quarters’ worth of sales numbers and a yearly goal. We can use Goal Seek to figure out what the numbers need to be in Q4 to make the goal.
As you can see, the current sales total is 114,706 units. If we want to sell 250,000 by the end of the year, how many do we need to sell in Q4? Excel’s Goal Seek will tell us.
Here’s how to use Goal Seek, step by step:
In our case, the solution is 135,294 units. Of course, we could have just found that by subtracting the running total from the annual goal. But Goal Seek can also be used on a cell that already has data in it. And that’s more useful.
Note that Excel overwrites our previous data. It’s a good idea to run Goal Seek on a copy of your data. It’s also a good idea to make a note on your copied data that it was generated using Goal Seek. You don’t want to confuse it for current, accurate data.
So Goal Seek is a useful Excel feature16 Excel Formulas that Will Help You Solve Real Life Problems16 Excel Formulas that Will Help You Solve Real Life ProblemsThe right tool is half the work. Excel can solve calculations and process data faster than you can find your calculator. We show you key Excel formulas and demonstrate how to use them.Read More, but it’s not all that impressive. Let’s take a look at a tool that’s much more interesting: the Solver add-in.
What Does Excel’s Solver Do?
In short, Solver is like a multivariate version of Goal Seek. It takes one goal variable and adjusts a number of other variables until it gets the answer you want.
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It can solve for a maximum value of a number, a minimum value of a number, or an exact number.
And it works within constraints, so if one variable can’t be changed, or can only vary within a specified range, Solver will take that into account.
It’s a great way to solve for multiple unknown variables in Excel. But finding and using it isn’t straightforward.
Let’s take a look at loading the Solver add-in, then jump into how to use Solver in Excel 2016.
How to Load the Solver Add-In
Excel doesn’t have Solver by default. It’s an add-in so, like other powerful Excel featuresPower Up Excel with 10 Add-Ins to Process, Analyze & Visualize Data Like a ProPower Up Excel with 10 Add-Ins to Process, Analyze & Visualize Data Like a ProVanilla Excel is amazing, but you can make it even more powerful with add-ins. Whatever data you need to process, chances are someone created an Excel app for it. Here's a selection.Read More, you have to load it first. Fortunately, it’s already on your computer.
Head to File > Options > Add-Ins. Then click on Go next to Manage: Excel Add-Ins.
If this dropdown says something other than “Excel Add-Ins,” you’ll need to change it:
In the resulting window, you’ll see a few options. Make sure the box next to Solver Add-In is checked, and hit OK.
You’ll now see the Solver button in the Analysis group of the Data tab:
If you’ve already been using the Data Analysis ToolpakHow to Do Basic Data Analysis in ExcelHow to Do Basic Data Analysis in ExcelExcel isn't meant for data analysis, but it can still handle statistics. We'll show you how to use the Data Analysis Toolpak add-in to run Excel statistics.Read More, you’ll see the Data Analysis button. If not, Solver will appear by itself.
Now that you’ve loaded the add-in, let’s take a look at how to use it.
How to Use Solver in Excel
There are three parts to any Solver action: the objective, the variable cells, and the constraints. We’ll walk through each of the steps.
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You can also generate reports, which we’ll look at briefly in our Solver example below.
How to Set Constraints in Solver
You might tell Excel that one variable has to be greater 200. When trying different variable values, Excel won’t go under 201 with that particular variable.
To add a constraint, click the Add button next to the constraint list. You’ll get a new window. Select the cell (or cells) to be constrained in the Cell Reference field, then choose an operator.
Here are the available operators:
AllDifferent is a little confusing. It specifies that every cell in the range that you select for Cell Reference must be a different number. But it also specifies that they must be between 1 and the number of cells. So if you have three cells, you’ll end up with the numbers 1, 2, and 3 (but not necessarily in that order)
Finally, add the value for the constraint.
It’s important to remember that you can select multiple cells for Cell Reference. If you want six variables to have values over 10, for example, you can select them all and tell Solver that they must be greater than or equal to 11. You don’t have to add a constraint for each cell.
You can also use the checkbox in the main Solver window to make sure that all of the values that you didn’t specify constraints for are non-negative. If you want your variables to go negative, uncheck this box.
A Solver Example
To see how all of this works, we’ll use the Solver add-in to make a quick calculation. Here’s the data we’re starting with:
In it, we have five different jobs, each of which pays a different rate. We also have the number of hours a theoretical worker has worked at each of those jobs in a given week. We can use the Solver add-in to find out how to maximize the total pay while keeping certain variables within some constraints.
Here are the constraints we’ll use:
It can be helpful to write out your constraints like this before using Solver.
Here’s how we’d set that up in Solver:
First, note that I’ve created a copy of the table so we don’t overwrite the original one, which contains our current working hours.
And second, see that the values in the greater-than and less-than constraints are one higher or lower than what I mentioned above. That’s because there’s no greater-than or less-than options. There are only greater-than-or-equal-to and less-than-or-equal-to.
Let’s hit Solve and see what happens.
Solver found a solution! As you can see to the left of the window above, our earnings have increased by $130. And all of the constraints have been met.
To keep the new values, make sure Keep Solver Solution is checked and hit OK.
If you want more information, though, you can select a report from the right side of the window. Select all of the reports that you want, tell Excel whether you want them outlined (I recommend it), and hit OK.
The reports are generated on new sheets in your workbook and give you information about the process the Solver add-in went through to get your answer.
In our case, the reports aren’t very exciting, and there’s not a whole lot of interesting information there. But if you run a more complicated Solver equation, you may find some useful reporting information in these new worksheets. Just click the + button on the side of any report to get more information:
Excel 2018 Solver Add In For Mac 2008Solver Advanced Options
If you don’t know much about statistics, you can ignore Solver’s advanced options and just run it as-is. But if you’re running large, complex calculations, you may want to look into them.
How To Load Solver Add-in For Excel
The most obvious is the solving method:
You can choose between GRG Nonlinear, Simplex LP, and Evolutionary. Excel provides a simple explanation regarding when you should use each one. A better explanation requires some knowledge of statisticsLearn Statistics for Free with These 6 ResourcesLearn Statistics for Free with These 6 ResourcesStatistics has a reputation of a subject that's difficult to understand. But learning from the right resource will help you understand survey results, election reports, and your stats class assignments in no time.Read More and regression.
Excel 2018 Solver Add In For Mac 2011
To adjust additional settings, just hit the Options button. You can tell Excel about integer optimality, set calculation time constraints (useful for massive datasets), and adjust how the GRG and Evolutionary solving methods go about making their calculations.
Again, if you don’t know what any of this means, don’t worry about it. If you want to know more about which solving method to use, Engineer Excel has a good article that lays it out for you. If you want maximum accuracy, Evolutionary is probably a good way to go. Just be aware that it will take a long time.
Goal Seek and Solver: Taking Excel to the Next Level
Now that you’re comfortable with the basics of solving for unknown variables in Excel, an entirely new world of spreadsheet calculation is open to you.
Goal Seek can help you save time by making some calculations faster, and Solver adds a huge amount of power to Excel’s calculating abilitiesHow to Calculate Basic Statistics in Excel: A Beginner's GuideHow to Calculate Basic Statistics in Excel: A Beginner's GuideMicrosoft Excel can do statistics! You can calculate percentages, averages, standard deviation, standard error, and student's T-tests.Read More.
It’s just a matter of getting comfortable with them. The more you use them, the more useful they’ll become.
Do you use Goal Seek or Solver in your spreadsheets? What other tips can you provide for getting the best answers out of them? Share your thoughts in the comments below!
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