I NFORMATION TECHNOLOGY

AN INTRODUCTION TO EXCEL
SOLVER – AN OPTIMIZATION
TOOL

([FHOVROYHULVDQRSWLPL]DWLRQWRROZKLFKFDQEHXVHGWRÀQGVROXWLRQRU
make decision on real life business problems, where we want to arrive at
decision either based on maximum or minimum value of something. For ex-
DPSOHSURÀWFRVWUHWXUQRQLQYHVWPHQWHWF8VLQJ([FHO6ROYHULVHDV\DQG
VLPSOH,WFDQEHXVHGWRDQVZHUSUREOHPVZKLFKRWKHUZLVHVHHPVGLIÀFXOWRU
time consuming. This article provides an insight into this tool.

tion problems’, ‘capital Budget-

M icrosoft Excel
Solver is an op-
timisation tool,
inbuilt provided into Ex-
cel. This tool can be used
LQJ SUREOHPV· ¶ÀQDQFLDO SODQ-
ning problems’, ‘retirement
planning problems’, and ‘work-
force scheduling problems’.
to solve practical business 8VLQJ ([FHO 6ROYHU LV HDV\ DQG
problems like ‘optimum — CA. Liyakatali Lal simple. It can be used to answer
product mix problems’, (The author is a Member of the Insti- problems which otherwise seem
tute. He can be reached at liyakatali_
‘transportation or distribu- [email protected]) GLIÀFXOWRUWLPHFRQVXPLQJ

FEBRUARY 2009 1408 THE CHARTERED ACCOUNTANT

 I NFORMATION TECHNOLOGY

See below listed illustrative problems: XYZ Textile Minimise Distribution

A 7\SHRI SUREOHP Example Ltd cost
Optimum product How can a large FMCG 6RIWZDUH /WG ² Maximise Net present val-
mix FRPSDQ\ GHWHUPLQH Project ue (NPV)
WKH PRQWKO\ SURGXFW I n v e s t m e n t Maximise Annual return
mix at their Mumbai planning
plant that maximizes
WKHLUSURÀWZLWKXVHRI  2. The changing cell represents cells that we can
limited resource? change or adjust to optimize the target cell. In our
examples
B Transportation or If XYZ Textile Ltd
Distribution produces textile at Example Changing cell
three different loca-
tions and distribute to )0&* &RPSDQ\ ² 4W\RI HDFKSURGXFWSUR-
four outlets, how can Product Mix duce during the month
WKH\PLQLPL]HWKHFRVW XYZ Textile Ltd 4W\ SURGXFH DW HDFK
of meeting demand for plant and shipped to
them? each outlet
C Capital Budgeting Software Ltd would like 6RIWZDUH/WG²3URMHFW Which project to be se-
to undertake 10 projects lected
(Selection of proj-
that will require capital
ect) Investment planning $PRXQW RI  PRQH\ LQ-
and labour for the next
IHZ\HDUV7KH\GRQRW vested in each asset class
have enough resources
3. The list of problem Constraints in our examples
for all projects; which
RQHV WKH\ VKRXOG XQ- Example Changing cell
dertake?
)0&* &RPSDQ\ ² Product mixes don’t
D Financial Planning How should I allocate
Product Mix use more resource than
P\ LQYHVWPHQW SRUWIR-
DYDLODEOH4W\VKRXOGQRW
lio among Govt. bond,
be more than demand.
blue chip stocks, specu-
lative stocks and short XYZ Textile Ltd Don’t ship more than
term deposits? SODQW FDSDFLW\ RXWOHW
UHFHLYH  4W\ ZKDW WKH\
,QDOOWKHDERYHVLWXDWLRQVZHZDQWWRÀQGWKH´EHVWµ need
ZD\WRGRVRPHWKLQJLHZHZDQWWRHLWKHUPD[LPL]H
or minimize values of certain cells in a worksheet to 6RIWZDUH/WG²3URMHFW Projects can’t use more
DFKLHYHRXUREMHFWLYH0LFURVRIW2IÀFH([FHO6ROYHU capital and labour than
tool helps us answer all such optimization problems. available
7KHEHVWZD\WRXQGHUVWDQGKRZWRXVH6ROYHULVWR Investment planning 0LQLPLVH ULVN DQG À[HG
look at some detailed examples % in speculation stock
An optimization model has three parts: target cell, 7R LQVWDOO 6ROYHU FOLFN WKH 0LFURVRIW 2IÀFH %XWWRQ
changing cells, and the constraints. click Excel Options, and click Add-Ins. In the Man-
1. The target cell represents the objective or goal. We age box at the bottom of the window, select Excel
want to either minimize or maximize the amount in Add-ins, and click Go. Check the Solver Add-in in the
the target cell. In our examples Add-Ins box, and click OK. After Solver is installed,
\RXFDQUXQ6ROYHUE\FOLFNLQJ6ROYHULQWKH'DWDWDE
Example Maximise or Target cell Figure 1 shows the Solver parameters dialog box.
minimise Navigation to Excel Solver tool:
FMCG Com- Maximise 3URÀW
SDQ\²3URGXFW ([FHO 2IÀFH %XWWRQ !! ([FHO 2SWLRQV !!
Mix $GG,QV!!,Q0DQDJHER[VHOHFW([FHO$GG,QV!!

THE CHARTERED ACCOUNTANT 1409 FEBRUARY 2009

 I NFORMATION TECHNOLOGY

*R!!&KHFN6ROYHU$GGLQ!!2.$IWHULQVWDOOD- available.
WLRQJRWR'DWDWDELQULEERQ!!6ROYHU
 :H FDQ
W SURGXFH PRUH WKDW LWV GHPDQG EHFDXVH
([FHO7RRO!!$GG,QV!!&KHFN6ROYHU$GG the excess production is wasted (for example, a per-
LQ!!2.$IWHULQVWDOODWLRQ7RRO!!6ROYHU ishable drug).
/HW
VVROYHWKHIROORZLQJH[DPSOHRI WKHSURGXFWPL[
SUREOHP 6D\ ZH ZRUN IRU D )0&* FRPSDQ\ WKDW
produces six different products at their plant. Produc-
tion of each product requires.

Figure 1 : Solver parameters dialog box

After we have input the target cell, changing cells, and
constraints, what does Solver do? To understand this Available
we need to know some background in Solver termi-
QRORJ\ $Q\ VSHFLÀFDWLRQ RI  WKH FKDQJLQJ FHOOV WKDW
VDWLVÀHVWKHPRGHO
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PL[WKDWVDWLVÀHVWKHIROORZLQJWKUHHFRQGLWLRQVZRXOG )LJXUH   )HDVLEOH VROXWLRQ QRW RSWLPXP ÀWV FRQ-
be a feasible solution: straints
1. Does not use more raw material or labour than
+RZFDQWKLVFRPSDQ\PD[LPL]HLWVPRQWKO\SURÀW
is available
within the labour, material and demand constraints?
2. Does not produce more of each product than
is demanded If we knew nothing about Excel Solver, we would
 'RHV QRW SURGXFH D QHJDWLYH DPRXQW RI  DQ\ DWWDFN WKLV SUREOHP E\ FRQVWUXFWLQJ D ZRUNVKHHW WR
product WUDFN SURÀW DQG UHVRXUFH XVDJH DVVRFLDWHG ZLWK WKH
SURGXFWPL[7KHQZHGRWULDODQGHUURUWRYDU\WKH
(VVHQWLDOO\6ROYHUVHDUFKHVDOOIHDVLEOHVROXWLRQVDQG
SURGXFWPL[WRRSWLPL]HSURÀWZLWKLQWKHJLYHQFRQ-
ÀQGVWKHRQHWKDWKDVWKHEHVWWDUJHWFHOOYDOXHWKH
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largest value for maximum optimization, the smallest
and-error stage i.e. Solver is an optimization tool that
for minimum optimization). Such a solution is called
performs the trial-and-error search.
an optimal solution. Some Solver models have no op-
timal solution and some have a unique solution. Oth- In solving the product mix problem we need to com-
HU 6ROYHU PRGHOV KDYH PXOWLSOH DFWXDOO\ DQ LQÀQLWH SXWH WKH UHVRXUFH XVDJH DQG SURÀW DVVRFLDWHG ZLWK
number of) optimal solutions. given product mix. An important function SUM-
PRODUCTFDQEHXVHGWRFDOFXODWHWKLV7KH680-
A. Determine the Optimal Product Mix:
352'8&7IXQFWLRQPXOWLSOLHVFRUUHVSRQGLQJYDOXHV
How can I determine the monthly product mix in cell ranges and returns the sum of those values.
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PXVWKDYHWKHVDPHGLPHQVLRQVLHZHFDQXVH680-
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352'8&7ZLWKWZRURZVRUWZRFROXPQVEXWQRW
SURGXFWWRSURGXFHRQDPRQWKO\EDVLV,QLWVVLPSOHVW
with one column and one row.
form, the product mix problem involves how to deter-
mine the amount of each product that should be pro- /HW
V WU\ WR FRPSXWH RXU UHVRXUFH XVDJH 2XU XVDJH
GXFHGGXULQJDPRQWKWRPD[LPL]HSURÀWV3URGXFW LVFDOFXODWHGDV/DERXU4W\RI 3 4W\SURGXFHRI 
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FEBRUARY 2009 1410 THE CHARTERED ACCOUNTANT

 I NFORMATION TECHNOLOGY

 *RUE\XVLQJ 680352'8&7%*%* Click the Options button in the Solver Parameters
6LPLODUO\ UDZ PDWHULDO XVDJH FRXOG EH FRPSXWHG DV dialog box. Check Assume Linear Model box and As-
% %& &' '( () )* * sume Non-Negative box as shown below. Click OK.
RUE\ 680352'8&7%*%*(QWHULQJ
formula in traditional fashion for six products is time-
consuming. Imagine how long it would take if we are
ZRUNLQJZLWKDFRPSDQ\WKDWSURGXFHGSURGXFWV
:H FDQ QRZ LGHQWLI\ WKH WKUHH FRPSRQHQWV RI  RXU
product mix solver model:
1. Target cell - Our goal is to maximize prof-
LW LQ FHOO % FRPSXWHG E\ IRUPXOD DV
680352'8&7%*%*
&KDQJLQJFHOOV7KH4W\SURGXFHGRI HDFKSURG-
uct (listed in the cell range B4:G4)
3. Constraints - We have the following constraints:
z Do not use more of labour or raw material
than available i.e. values in cells B13:B14 (used)
must be less than or equal to the values in cells
D13:D14 (available).
z Do not produce more of a drug than its de- Figure 4 : Solver option settings
mand i.e. values in the cells B4:G4 (produced) Checking the Assume Non-Negative box ensures
must be less than or equal to the value in cell that changing cell assumes a non-negative value. We
B3:G3 (demand). checked the Assume Linear Model box because this is
z :H FDQ
W SURGXFH D HLWKHU SDUWLDO RU QHJDWLYH DOLQHDUSUREOHP(VVHQWLDOO\D6ROYHUPRGHOLVOLQHDU
4W\RI DQ\SURGXFW under the following conditions:
Now enter the target cell, changing cells and con-  7KHWDUJHWFHOOLVFRPSXWHGE\DGGLQJWRJHWKHU
straints into Solver. Then click the Solve button to WKHWHUPVLQIRUPFKDQJLQJFHOO FRQVWDQW
ÀQGDSURÀWPD[LPL]LQJSURGXFWPL[6ROYHUSDUDP-  (DFKFRQVWUDLQWLVHYDOXDWHGE\DGGLQJWRJHWKHU
eter dialog box will look like WKHWHUPVLQIRUPFKDQJLQJFHOO FRQVWDQW
6LQFHRXUSURGXFWPL[SUREOHPLVDOLQHDUPRGHOZK\
should we care?
1. If a Solver model is linear and we select As-
sume Linear Model, Solver is guaranteed to
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,I D6ROYHUPRGHOLVQRWOLQHDU6ROYHUPD\RU
PD\QRWÀQGWKHRSWLPDOVROXWLRQ
2. If a Solver model is linear and we select As-
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DOJRULWKP WKH VLPSOH[ PHWKRG WR ÀQG WKH
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is linear and we do not select Assume Linear
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WKH*5*PHWKRGDQGPLJKWKDYHGLIÀFXOW\
ÀQGLQJWKHPRGHO
VRSWLPDOVROXWLRQ
After clicking OK in the Solver Options box, we re-
turn to the main Solver parameter dialog box, shown
earlier in Figure 3. When we click Solve, Solver calcu-
Figure 3 : Final dialog box for product mix problem

THE CHARTERED ACCOUNTANT 1411 FEBRUARY 2009

 I NFORMATION TECHNOLOGY

lates an optimal solution (if one exists) for our prod- tribution cost
uct mix problem. An optimum solution calculated in  &KDQJLQJFHOOV7KH4W\SURGXFHGDWHDFKVXS-
)LJXUH SO\SRLQWDQGVKLSSHGWRHDFKGHPDQGSRLQW
 &RQVWUDLQWV  7KH 4W\ VKLSSHG IURP HDFK
VXSSO\SRLQWFDQ
WH[FHHGSODQWFDSDFLW\(DFK
demand point must receive its required de-
mand. Also, each changing cell must be non
QHJDWLYHDQGDQLQWHJHUQXPEHU3DUWLDO4W\
cannot be shipped)
If XYZ Textile Ltd produces textile at three different
Available ORFDWLRQVDQGGLVWULEXWHWRIRXURXWOHWVKRZFDQWKH\
minimize the cost of meeting demand for them?
/HW
VQRZVROYHWKHIROORZLQJH[DPSOHRI WKH7UDQV-
portation problem.

)LJXUH2SWLPXPVROXWLRQRI SURGXFWPL[ZLWKLQ
constraint
2XU)0&*&RPSDQ\FDQPD[LPL]HSURÀWRI 
E\ SURGXFLQJ  XQLW RI  5  XQLWV RI  6 DQG 
units of T. We can be sure that with our limited re-
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WKDQ
Is it necessary that Solver model always have a
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function
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product must be met. Demand constraint will change from
)LJXUH   )HDVLEOH VROXWLRQ QRW RSWLPXP ZLWKLQ
%* %*WR%*! %*6ROYHUUHVXOWJLYHV
constraints
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This message means that with our limited resources, we :HFDQQRZLGHQWLI\WKHWKUHHFRPSRQHQWVRI 7UDQV-
FDQ
WPHHWGHPDQGIRUDOOSURGXFWV portation Solver model:
What if Solver result gives the message as “The 1. Target cell - Our goal is to minimise Total ship-
VHWFHOOYDOXHVGRQRWFRQYHUJHµ" PHQW FRVW LQ FHOO & FRPSXWHG E\ XVLQJ IRUPXOD
680352'8&7%(%( RU FDQ DOVR EH
/HW
VVHHZKDWKDSSHQVLI ZHDOORZXQOLPLWHGGHPDQG
FDOFXODWHGLQWHGLRXVIDVKLRQDV % %& &
for each product, delete demand constraint and we
' '( (% %& &' '(
DOORZQHJDWLYH4W\WREHSURGXFHGFOHDUWKH$VVXPH
 (% %& &' '( (
Negative box. When we click Solve, Solver returns the
PHVVDJH 6HW &HOO 9DOXHV 'R 1RW &RQYHUJH 7KLV >1RWH 7KH 680352'8&7 IXQFWLRQ FDQ PXOWL-
means that our model has an error. SO\FRUUHVSRQGLQJHOHPHQWLQWZRVHSDUDWHUHFWDQJOH
(both rectangle are of the same size) and add together
%7UDQVSRUWDWLRQRU'LVWULEXWLRQ3UREOHPV
the product.]
0DQ\ FRPSDQLHV PDQXIDFWXUH SURGXFWV DW GLIIHUHQW
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ORFDWLRQV 6XSSO\ SRLQW DQG VKLS WKHLU SURGXFWV WR
point (Factories) and shipped to each demand point
customers (Demand points). A question then is, what
(Outlet), (listed in the cell range B12:E14).
LVWKHOHDVWH[SHQVLYHZD\WRSURGXFHDQGVKLSSURG-
XFWVWRFXVWRPHUVDQGVWLOOPHHWGHPDQG"7KLVW\SHRI  3. Constraints - We have the following constraints:
problem is called a transportation problem. A trans- z 'R QRW VKLS IURP HDFK )DFWRU\ PRUH WKDQ
portation problem is a linear model with the following SODQW FDSDFLW\ LH YDOXHV LQ FHOOV ))
VSHFLÀFDWLRQV (Sent) must be less than or equal to the values
1. Target cell - Minimize total shipping and dis- LQFHOOV++FDSDFLW\

FEBRUARY 2009 1412 THE CHARTERED ACCOUNTANT

 I NFORMATION TECHNOLOGY

z Demand from each of warehouse outlet &&DSLWDO%XGJHWLQJ3UREOHPV:

PXVWEHPHWLHYDOXHVLQWKHFHOOV%(
(received) must be more than or equal to the 0DQ\FRPSDQLHVOLNHWRNQRZZKLFKQHZSURGXFWVWR
value in cell B17:E17 (demand). develop or which projects to be undertaken, i.e. one
z :HFDQ
WVKLSHLWKHUSDUWLDORUQHJDWLYH4W\RI  want to undertake projects that contribute the greatest
DQ\SURGXFWLHYDOXHLQFHOO%(VKRXOG net present value (NPV), subject to limited resources
be an integer. XVXDOO\FDSLWDODQGODERXU7KH6ROYHUIHDWXUHLQ0L-
Now enter the target cell, changing cells and con- FURVRIW2IÀFH([FHOFDQKHOSWRPDNHVXFKGHFLVLRQV
straints into Solver. Then click the Solve button to /HW
VORRNDWWKLVSUREOHP6RIWZDUH/WGZRXOGOLNHWR
ÀQGDPLQLPXPVKLSPHQWFRVW6ROYHUSDUDPHWHUGLD- undertake 10 projects that will require capital and labour
log box will look like IRUWKHQH[W\HDUV7KH\GRQRWKDYHHQRXJKUHVRXUFHV
IRUDOOSURMHFWVZKLFKRQHVVKRXOGWKH\XQGHUWDNH"

Figure 7 : Final solver dialog box for Transportation

problem
Our transportation problem is a linear Solver model
EHFDXVHRXUWDUJHWFHOOLVFUHDWHGE\DGGLQJWRJHWKHU
WKHWHUPVLQIRUPFKDQJLQJFHOO FRQVWDQWDQGERWK
RXU VXSSO\ DQG GHPDQG FRQVWUDLQWV DUH FUHDWHG E\
comparing the sum of changing cells to a constant.
Thus, Click Options and check the Assume Linear )LJXUH'DWDWRGHFLGHZKLFKSURMHFWWRXQGHUWDNH
0RGHODQG$VVXPH1RQ1HJDWLYHER[HV)LQDOO\&OLFN Capital budgeting problem
Solve, Solver will calculate an optimal solution (if one 3UREOHPV ZKHUH HLWKHU ZH ZDQW WR GR RU GRQ
W GR
exists) for our transportation problem. An optimum VRPHWKLQJ FDQ EH VROYHG E\ XVLQJ ELQDU\ FKDQJLQJ
solution calculated in Figure 8. FHOOV $ ELQDU\ FKDQJLQJ FHOO DOZD\V HTXDOV  RU 
Where 1 = Do the project and 0 = don’t do the proj-
HFW )RU WKLV ZH QHHG WR DGG FRQVWUDLQW E\ VHOHFWLQJ
changing cell and then choose bin from the list in the
Add Constraint dialog box.

Figure 8 : Optimum solution for transportation prob-

OHPWKDWÀWVFRQVWUDLQWV
The minimum shipment cost of meeting demand of XYZ
/WGLVGHULYHGE\VXSSO\LQJXQLWVIURP)DFWRU\ Figure 10 : Add constraint box with option of bin =
WR:XQLWVIURP)DFWRU\WR:DQGVRRQ« %LQDU\ LQW ,QWHJHU

THE CHARTERED ACCOUNTANT 1413 FEBRUARY 2009

 I NFORMATION TECHNOLOGY

NRZOHWXVVROYHWKLVSUREOHPE\LGHQWLI\WKHWKUHH Since our model is linear, we will also check the As-
components of capital budgeting model: sume Linear Model and Assume Non-Negative boxes
XQGHU2SWLRQ)LQDOO\&OLFN6ROYH6ROYHUZLOOFDlculate
1. Target cell - Our goal is to maximise To-
an optimal solution for our capital budgeting prob-
WDO 139 LQ FHOO ( FRPSXWHG E\ XVLQJ IRUPXOD lem. An optimum solution calculated in Figure 12.
680352'8&7$$&& WKLV IRUPXOD
RQO\SLFNVXS139RI SURMHFWZLWKLQFROXPQ
A and doesn’t consider NPV with 0 in column
A. It can also be calculated in tedious fashion
E\PXOWLSO\LQJELQDU\YDULDEOHLQFROXPQ$ZLWK
139 YDOXHVLQ FROXPQ & HYHU\ URZ ZLVH DQG
adding together for all projects to arrive at total
139ÀJXUH
&KDQJLQJFHOOV:HORRNIRUDRUELQDU\
changing cell for each project (listed in A3:A12).
Here, 1 = Do the project and 0 = don’t do the
project.
3. Constraints - We have the following con-
straints:
z Do not use capital and labour more
WKDQ DYDLODEOH LQ HDFK \HDU LH YDO-
XHV LQ FHOOV (+ 8VHG PXVW
be less than or equal to the values
Figure 12 : Optimum solution - maximum NPV with-
LQ FHOOV (+ $YDLODEOH 8VHG FDSLWDO
in constraint
DQG ODERXU LV FRPSXWHG E\ XVLQJ IRUPXOD
680352'8&7$$ (( 6RIWZDUH/WGFDQREWDLQPD[LPXP139RI E\
DQG FRS\IURP (+  VLJQ LV XVHGIRU VHOHFWLQJSURMHFWDQG
absolute cell referencing). D. Financial Planning:
z Values of changing cell listed in A3:A12 7KH6ROYHUIHDWXUHLQ0LFURVRIW2IÀFH([FHOFDQEH
VKRXOGEH%LQDU\ XVHGDVDSRZHUIXOWRROIRUDQDO\]LQJÀQDQFLDOSODQ-
QLQJSUREOHPVOLNHKRZPXFKPRQH\,QHHGWRVDYH
After entering the target cell, changing cells and con-
IRUUHWLUHPHQW"2UKRZVKRXOG,DOORFDWHP\LQYHVW-
straints into Solver. Solver parameter dialog box will ment portfolio among Govt. bond, blue chip stocks,
look like speculative stocks and short term deposits?
/HW
VORRNDWWKHH[DPSOHLQ)LJXUHZHKDYHWRWDO
fund of 20 Lakhs to invest in among 4 options within
following constraints:
z :HLJKWHGDYHUDJHULVNIDFWRUQRWWRH[FHHG
z Amt in speculative stocks should not exceed
20% of total amount invested
z At least 2 Lakhs to be invested in short term
deposits
z ,QYHVWPHQW LQ DQ\ RSWLRQ VKRXOG EH ZKROH
number i.e. fraction of rupee cannot be in-
Figure 11 : Final solver dialog box with constraint YHVWHGLQDQ\RSWLRQ

FEBRUARY 2009 1414 THE CHARTERED ACCOUNTANT

 I NFORMATION TECHNOLOGY

should be at least 2 Lakhs.

z ,QYHVWPHQW DPRXQW LQ FHOO UDQJH ''
should be an integer.
After entering the target cell, changing cells and con-
straints into Solver. Solver parameter dialog box will
look like

Figure 13 : Feasible solution (not optimum) for In-

vestment decision within given constraints
:HFDQQRZLGHQWLI\WKHWKUHHFRPSRQHQWVRI ,Qvest-
ment problem:
1. Target cell - Our goal is to maximise Annual Return
LQFHOO(FRPSXWHGDV 680((
2. Changing cells - The Investment amount in each
RSWLRQOLVWHGLQWKHFHOOUDQJH''
3. Constraints - We have the following constraints: Figure 14 : Final solver dialog box with all constraints
for Investment decision
z 7RWDOLQYHVWPHQWDPWYDOXHLQFHOO'QRWWR
exceed total fund available i.e. 20 Lakhs. ,QWKLVÀQDQFLDOSODQQLQJSUREOHPRXUPRGHOLVQRQ
linear as the relationship that each constraint should be
z Weighted average risk factor computed in
LQIRUPFKDQJLQJFHOO FRQVWDQWLVQRWVDWLVÀHGLQ
FHOO& 680352'8&7&&''
case of Risk factor constraint, where we have used divi-
680''QRWWRH[FHHG
VLRQWRFDOFXODWHZHLJKWHGDYHUDJH:HZLOORQO\FKHFN
z Amt in speculative stocks i.e. value in cell D4 WKH$VVXPH1RQ1HJDWLYHER[HVXQGHU2SWLRQ)LQDOO\
not more than value in cell G4 (20% of total Click Solve, Solver will calculate an optimal solution for
amount invested) RXUÀQDQFLDOSODQQLQJ,QYHVWPHQWSUREOHP$QRSWL-
z ,QYHVWPHQWLQ6KRUWWHUPGHSRVLWVLQFHOO' PXPVROXWLRQFDOFXODWHGLQ)LJXUH

)LJXUH2SWLPXPVROXWLRQZLWKLQFRQVWUDLQWVIRU Conclusion:
Investment planning
Excel solver is an optimization tool which can be used
0D[LPXPDQQXDOUHWXUQRI FDQEHREWDLQHG WRÀQGVROXWLRQRUPDNHGHFLVLRQRQUHDOOLIHEXVLQHVV
E\LQYHVWLQJLQ*RYWERQGLQ%OXH problems, where we want to arrive at decision either
chip stocks, 4 Lakhs in Speculative stocks and 2 Lakhs based on maximum or minimum value of something.
in Short term deposits. )RUH[DPSOHSURÀWFRVWUHWXUQRQLQYHVWPHQWHWF‰

THE CHARTERED ACCOUNTANT 1415 FEBRUARY 2009