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How can a simple tool such as Excel be used to conduct an analysis of different...

How can a simple tool such as Excel be used to conduct an analysis of different products/services?

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Answer #1

Excel can be used to compute the costs of a product under different scenarios. We can change the values of the inputs to arrive at different conclusions.

Also the selling price of the product can be changed in excel very easily. This will allow us to perform scenario analysis whch shows the values under different scenarios such as high demand or low demand.

We can also perform sensitiivty analysis in excel which shows how sensitive the profits are to changes in certain factors. For instance if the shipping cost changes per unit, what will be the impact on the profits contributed by a specific product.

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