This message appears when the Polymorphic Spreadsheet Interpreter in Analytic Solver is being used (Solve With = PSI Interpreter), and the Interpreter encounters an error when computing derivatives via automatic differentiation. The most common cause of this message is a non-smooth function in your objective or constraints, for which the derivative is undefined. But in general, automatic differentiation is somewhat more strict than finite differencing: As a simple example, =SQRT(A1) evaluated at A1=0 will yield this error message when the Solver is using automatic differentiation (since the derivative of the SQRT function is algebraically undefined at zero), but it won’t yield an error when Solve With = Excel Interpreter and the Solver is using finite differencing.
If you receive this message, create a Structure Report to pinpoint the exact cell formulas that are non-smooth, and confirm that the “Nonsmooth Model Transformation” option on the Task Pane Platform tab is set to “Automatic” to eliminate the non-smooth functions automatically. If you can’t modify your formulas to eliminate the non-smooth functions, your options are to (i) use a Solver engine, such as the Evolutionary Solver or the OptQuest Solver, that doesn’t require derivatives, or (ii) set Solve With = Excel Interpreter and solve the problem using finite differencing.