# How to Create a Scenario in Excel_ Tutorial for Beginners

November 15, 2023 951 views

Scenario analysis is a powerful tool for making better decisions in the face of uncertainty. By creating different scenarios in Excel, you can explore different outcomes and make more informed choices.

This tutorial will teach you how to create scenarios in Excel, even if you're a beginner. We'll start with the basics and then cover more advanced topics, such as how to use scenario summaries and how to compare different scenarios.

## 1.What is Creating Scenarios in Excel?

Creating scenarios in Excel is a process of defining different sets of values for input cells and then calculating the resulting output. This can be used to explore different outcomes and make better decisions.

## 2.What are the benefits of creating scenarios in Excel?

There are many benefits to creating scenarios in Excel, including:

● Identifying potential risks and opportunities: By creating scenarios, you can explore different potential outcomes and identify potential risks and opportunities. This can help you to make better decisions and to develop contingency plans.

Making better decisions: By understanding how the output of a worksheet changes under different input conditions, you can make better decisions about how to proceed.

Improving communication: Sharing scenarios with others can help to improve communication and understanding. This can be useful when collaborating on projects or when making decisions that affect multiple people.

## 3.What are the different types of scenarios I can create in Excel?

There are two main types of scenarios that you can create in Excel:

Single-cell scenarios: These scenarios change the value of a single cell in the worksheet.

Multi-cell scenarios: These scenarios change the values of multiple cells in the worksheet.

You can also create scenarios that change the formulas in your worksheet. This can be useful for testing different approaches to solving a problem.

## Part2. How to Create a Scenario in Excel (Step-by-Step)

Creating scenarios in Excel is a powerful tool for making better decisions in the face of uncertainty. By following the steps in this tutorial, you can learn how to create scenarios and use them to explore different outcomes and make more informed choices.

### 1.Set up the Excel Scenarios Worksheet

Step 1: Open Excel

Launch Microsoft Excel on your computer.

Step 2: Create a New Worksheet

Start a new worksheet where you'll set up your scenarios.

Step 3: Identify Variables

In your worksheet, identify the variables you want to change (input values) and the cell containing the formula you want to analyze.

Step 4: Label the Cells

Label or name the cells with variables and the result cell for better clarity.

My Experience: Setting up the worksheet is crucial. Clearly labeled cells make it easier to define and manage your scenarios.

### 2.Create First Excel Scenario

Step 1: Go to the Data Tab, click on "What-If Analysis" in the Data tab's menu.

Choose "Scenario Manager" from the "What-If Analysis" menu.

In the Scenario Manager dialog, click "Add."

Step 3: Name the Scenario:

Give your scenario a descriptive name.

Step 4: Specify Changing Cells:

Identify the cells that will change for this scenario by selecting them.

Step 5: Set Values for the Changing Cells:

Enter the values you want for these cells in the scenario.

Step 6: Save the Scenario:

Click "OK" to save the scenario.

Step 7: Click the OK button, to return to the Scenario Manager.

My Experience: Creating the first scenario is straightforward. Naming and specifying the changing cells accurately is key to conducting effective what-if analysis.

### 3.Create Second Excel Scenario

Step 1: To prepare for the Second scenario, change the values in cells B1, B3 and B4, as shown below

Step 2: Go to the Data Tab, click on "What-If Analysis" in the Data tab's menu.

Choose "Scenario Manager" from the "What-If Analysis" menu.

In the Scenario Manager dialog, click "Add" again.

Step 4: Name the Second Scenario

Give your second scenario a unique name.

Step 5: Specify Changing Cells for the Second Scenario

Identify the cells that will change for this scenario by selecting them.

Step 6: Set Values for the Changing Cells:

Enter the values for the changing cells in this second scenario.

Step 7: Save the Scenario:

Click "OK" to save the second scenario.

Step 7: Click the OK button, to return to the Scenario Manager.

My Experience: Creating additional scenarios follows the same process as the first one. It's essential to give each scenario a meaningful name to distinguish between them.

### 4.Show an Excel Scenario

Once you have created Scenarios, you can show them. Please follow these steps:

Step 1: In the Scenario Manager:

Select the scenario you want to view.

Step 2: Click "Show":

Once you've selected a scenario, click the "Show" button.

Step 3: View the Scenario:

Excel will adjust the values of the specified cells to match the scenario, and you can observe the impact on the formula result in your worksheet.

My Experience: Viewing scenarios is simple and provides valuable insights into how different input values affect the outcome.

### 5.Add Scenario to Excel Ribbon

Step 1: Customize Ribbon:

Right-click on the Ribbon, and click Customize the Ribbon

On the right side, choose "All Commands" from the dropdown

Step 3: In the list of commands that are currently on the Ribbon, click the plus sign for Data, then click Data Tools. That group contains the Scenario Manager, so we'll add the new group beside it.

Step 4: Below the list, click the New Group button.

Step 5: Then, click the Rename button, type Scenario as the name for the group, and click OK

Step 6: At the left, in the list of All Commands, scroll down to find Scenario

Make sure that the new Scenario group is still selected in the list at the right.

Click on Scenario, then click Add, to put Scenario in the Scenario group.

Step 7: Click OK, to close the window, then click the Data tab, and select a Scenario to view

My Experience: Adding Scenario Manager to the Excel ribbon enhances accessibility and streamlines the process.

I have found that using scenarios in Excel is a very helpful way to analyze different outcomes and make better decisions. For example, I have used scenarios to analyze the profitability of new products, the impact of different marketing campaigns, and the financial risk of different investment strategies.

Tip:

When creating scenarios, it is important to be realistic and to consider all possible outcomes. It is also helpful to have a clear understanding of your goals and objectives.

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## FAQs

### 1. What is an example of a scenario?

A scenario is a hypothetical description of a possible future event or situation. For example, a scenario for a business could be a best-case scenario where sales exceed expectations, or a worst-case scenario where the business loses money.

### 2. What is the difference between a data table and a scenario manager in Excel?

A data table can only handle two input variables, while a scenario manager can handle up to 32 input variables. Data tables are good for simple scenarios, while scenario managers are better for complex scenarios.

## Summary

The article provides a comprehensive tutorial on creating scenarios in Excel, guiding beginners through the process step by step. It covers setting up Excel scenarios, creating multiple scenarios, viewing them, and integrating Scenario Manager into the Excel ribbon.

Additionally, it highlights the seamless compatibility of Excel formulas with WPS Spreadsheet, emphasizing the versatility of WPS Office as a robust alternative to Microsoft Office. Users are encouraged to explore WPS Office's free version, offering comparable features to Microsoft Office, making it a practical and budget-friendly choice for diverse users.

15 years of office industry experience, tech lover and copywriter. Follow me for product reviews, comparisons, and recommendations for new apps and software.