The tutorial explains how to add and where to find Solver in different Excel versions, from 2016 to 2003. Step-by-step examples show how to use Excel Solver to find optimal solutions for linear programming and other kinds of problems.
Everyone knows that Microsoft Excel contains a lot of useful functions and powerful tools that can save you hours of calculations. But did you know that it also has a tool that can help you find optimal solutions for decision problems?
In this tutorial, we are going to cover all essential aspects of the Excel Solver add-in and provide a step-by-step guide on how to use it most effectively.
What is Excel Solver?
Excel Solver belongs to a special set of commands often referred to as What-if Analysis Tools. It is primarily purposed for simulation and optimization of various business and engineering models.
The Excel Solver add-in is especially useful for solving linear programming problems, aka linear optimization problems, and therefore is sometimes called a linear programming solver. Apart from that, it can handle smooth nonlinear and non-smooth problems. Please see Excel Solver algorithms for more details.
While Solver can't crack every possible problem, it is really helpful when dealing with all kinds of optimization problems where you need to make the best decision. For example, it can help you maximize the return of investment, choose the optimal budget for your advertising campaign, make the best work schedule for your employees, minimize the delivery costs, and so on.
How to add Solver to Excel
The Solver add-in is included with all versions of Microsoft Excel beginning with 2003, but it is not enabled by default.
To add Solver to your Excel, perform the following steps:
- In Excel 2010 - Excel 365, click File > Options.
In Excel 2007, click the Microsoft Office button, and then click Excel Options. - In the Excel Options dialog, click Add-Ins on the left sidebar, make sure Excel Add-ins is selected in the Manage box at the bottom of the window, and click
Go.
- In the Add-Ins dialog box, check the Solver Add-in box, and click OK:
To get Solver on Excel 2003, go to the Tools menu, and click Add-Ins. In the Add-Ins available list, check the Solver Add-in box, and click OK.
Note. If Excel displays a message that the Solver Add-in is not currently installed on your computer, click Yes to install it.
Where is Solver in Excel?
In the modern versions of Excel, the Solver button appears on the Data tab, in the Analysis group:
Where is Solver in Excel 2003?
After
the Solver Add-in is loaded to Excel 2003, its command is added to the Tools menu:
Now that you know where to find Solver in Excel, open a new worksheet and let's get started!
Note. The examples discussed in this tutorial use Solver in Excel 2013. If you have another Excel version, the screenshots may not match your version exactly, although the Solver functionality is basically the same.
How to use Solver in Excel
Before running the Excel Solver add-in, formulate the model you want to solve in a worksheet. In this example, let's find a solution for the following simple optimization problem.
Problem. Supposing, you are the owner of a beauty salon and you are planning on providing a new service to your clients. For this, you need to buy a new equipment that costs $40,000, which should be paid by instalments within 12 months.
Goal: Calculate the minimal cost per service that will let you pay for the new equipment within the specified timeframe.
For this task, I've created the following model:
And now, let's see how Excel Solver can find a solution for this problem.
1. Run Excel Solver
On the Data tab, in the Analysis group, click the Solver button.
2. Define the problem
The Solver Parameters window will open where you have to set up the 3 primary components:
- Objective cell
- Variable cells
- Constraints
Exactly what does Excel Solver do with the above parameters? It finds the optimal value [maximum, minimum or specified] for the formula in the Objective cell by changing the values in the Variable cells, and subject to limitations in the Constraints cells.
Objective
The Objective cell [Target cell in earlier Excel versions] is the cell containing a formula that represents the objective, or goal, of the problem. The objective can be to maximize, minimize, or achieve some target value.
In this example, the objective cell is B7, which calculates the payment term using the formula =B3/[B4*B5] and the result of the formula should be equal to 12:
Variable cells
Variable cells [Changing cells or Adjustable cells in earlier versions] are cells that contain variable data that can be changed to achieve the objective. Excel Solver allows specifying up to 200 variable cells.
In this example, we have a couple of cells whose values can be changed:
- Projected clients per month [B4] that should be less than or equal to 50; and
- Cost per service [B5] that we want Excel Solver to calculate.
Tip. If the variable cells or ranges in your model are non-adjacent, select the first cell or range, and then press and hold the Ctrl key while selecting other cells and/or ranges. Or, type the ranges manually, separated with commas.
Constraints
The Excel Solver Constrains are restrictions or limits of the possible solutions to the problem. To put it differently, constraints are the conditions that must be met.
To add a constraint[s], do the following:
- Click the Add button right to the "Subject to the Constraints" box.
- In the Constraint window, enter a constraint.
- Click the Add button to add the constraint to the list.
- Continue entering other constraints.
- After you have entered the final constraint, click OK to return to the main Solver Parameters window.
Excel Solver allows specifying the following relationships between the referenced cell and the constraint.
- Less than or equal to, equal to, and greater than or equal to. You set these relationships by selecting a cell in the Cell Reference box, choosing one of the following signs: =, and then typing a number, cell reference / cell name, or formula in the Constraint box [please see the above screenshot].
- Integer. If the referenced cell must be an integer, select int, and the word integer will appear in the Constraint box.
- Different values. If each cell in the referenced range must contain a different value, select dif, and the word AllDifferent will appear in the Constraint box.
- Binary. If you want to limit a referenced cell either to 0 or 1, select bin, and the word binary will appear in the Constraint box.
Note. The int, bin, and dif relationships can only be used for constraints on Variable cells.
To edit or delete an existing constraint do the following:
- In the Solver Parameters dialog box, click the constraint.
- To modify the selected constraint, click Change and make the changes you want.
- To delete the constraint, click the Delete button.
In this example, the constraints are:
- B3=40000 - cost of the new equipment is $40,000.
- B4