1. Computational Methods for Management and Economics Carla Gomes Module 4 Displaying and Solving LP Models on a Spreadsheet

2. Developing a Spreadsheet Model Step #2: Changing Cells –Add a cell in the spreadsheet for every decision variable. –If you don’t have any particular initial values, just enter 0 in each. –It is a good idea to color code these “changing cells” (e.g., yellow with border). Step #1: Data Cells –Enter all of the data for the problem on the spreadsheet. –Make consistent use of rows and columns. –It is a good idea to color code these “data cells” (e.g., light blue).

3. Developing a Spreadsheet Model Step #3: Target Cell –Develop an equation that defines the objective of the model. –Typically this equation involves the data cells and the changing cells in order to determine a quantity of interest (e.g., total profit or total cost). –It is a good idea to color code this cell (e.g., orange with heavy border).

4. Developing a Spreadsheet Model Step #4: Constraints –For any resource that is restricted, calculate the amount of that resource used in a cell on the spreadsheet (an output cell). –Define the constraint in three consecutive cells. For example, if Quantity A ≤ Quantity B, put these three items (Quantity A, ≤, Quantity B) in consecutive cells.

5. A Trial Solution The spreadsheet for the Wyndor problem with a trial solution (4 doors and 3 windows) entered into the changing cells.

6. Identifying the Target Cell and Changing Cells Choose the “Solver” from the Tools menu. Select the cell you wish to optimize in the “Set Target Cell” window. Choose “Max” or “Min” depending on whether you want to maximize or minimize the target cell. Enter all the changing cells in the “By Changing Cells” window.

7. Adding Constraints To begin entering constraints, click the “Add” button to the right of the constraints window. Fill in the entries in the resulting Add Constraint dialogue box.

8. The Complete Solver Dialogue Box

9. Some Important Options Click on the “Options” button, and click in both the “Assume Linear Model” and the “Assume Non-Negative” box. –“Assume Linear Model” tells the Solver that this is a linear programming model. –“Assume Non-Negative” adds nonnegativity constraints to all the changing cells.

10. The Solver Results Dialogue Box

11. The Optimal Solution