A scenario generally consists of 2 parts. The first part is a calculation (or series of calculations) that show the outcome of various scenarios. In this case the calculations generate estimated sales, costs, and profits.

The second part is a set of scenario variables. In this case, change in quantity sold, change in price, and change in cost. These variables are used in the calculations to generate forecasted values.

Any change to these scenario variables will change the forecasted values in the spreadsheet.

Because the focus of this module is on how to create and use scenarios and not on creating calculations; we'll open a sample that already contains the necessary calculations. The sample spreadsheet is named scenariospreadsheet.ooc.

In this scenario there are 3 things that change; the quantity sold, the sales price and the cost to produce the items that are sold. To create a scenario, select these 3 cells, then select the scenarios... option from the tools menu.

Name the scenario "Most Likely". It's a good idea to enter a comment describing the scenario in case you forget what the scenario represents later.

When you're finished, click the OK button.

Calc will generate a dropdown list containing your scenario, outlined by a gray frame.

Next, complete the same steps to create the worst case scenario.

Select the cells, select scenarios from the tools menu then enter a name and description.

Then click OK.

Repeat the same steps again for the best case scenario.

Now that you have placeholders for the three different scenarios you can populate each of the scenarios with the appropriate values.

To build the most likely scenario, select “Most Likely” from the scenario dropdown list. Assume that change in qty. sold is 8%. . Enter 8 percent in the change in quantity cell.

Next, assume that the most likely change in price is 3%. Enter .03 in the change in price cell.

Finally, assume that the most likely change in cost is 2%. Enter .02 in the change in Cost cell.

Now that the definition of the most likely scenario is complete, it's time to define the worst case scenario.

Select worst case scenario from the dropdown list and change the values.

The projected worst case scenario would be where quantity sold is down 10%, prices drop 20% to liquidate inventory, and costs increase 10%.

Finally, complete the same steps to add values to the best case scenario.

For this scenario sales volume could grow 15%, Costs would be reduced by 7% due to volume pricing and other efficiencies, prices could increase 5% because the Garden Center would not have to discount as deeply.

Now that you have completed the scenario definitions, you can switch between scenarios at the click of a button.