Spreadsheet Modeling for Business Decisions
Edition: 5
Copyright: 2016
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Updated for use with Microsoft Office Excel 2016 with an emphasis on model formulation and interpretation rather than on computer code or algorithms, Spreadsheet Modeling for Business Decisions examines the core methods used by managers in their everyday problem solving situations. This text provides the reader with a process to improve their own critical thinking, management judgment, and communication with their end-user clients.
Spreadsheet Modeling for Business Decisions focuses on five fundamental topics of quantitative business decision making and management science, making it suitable for a survey course in management science, but specific enough to satisfy upper division “elective” courses and graduate level MBA courses in quantitative methods or business decision making.
The new fifth edition of Spreadsheet Modeling for Business Decisions:
- Includes a new chapter on inventory modeling and incorporates the Analytic Solver for decision analysis, simulation, and optimization.
- Features examples, as well as exercises, that guide the reader in forming their own decision making process, understanding the output from their analysis, and communicating that analysis in written and verbal form.
- Includes an enhanced online learning package featuring: supplementary software programs, such as Analytic Solver, Treeplan, @Risk, and other add-ins for spreadsheets; integrated case studies, decision tree add-in programs, video lectures, interactive quizzes, and much more.
ISBN: 9781524939311 is a perfect bound text
ISBN: 9781524963392 is a looseleaf text
CHAPTER 1 The Art and Science of Becoming a More Effective and Efficient Problem Solver
Business Decision Modeling in Action—Algorithm? What the Heck Is an Algorithm?
The Art and Science of Using Business Decision Modeling to Become a More Effective and Efficient Problem Solver
The Business Decision Modeling Process
Business Decision Modeling throughout the Ages— A Brief History
Business Decision Modeling Behind the Scenes— The RAND Corporation
Computer-Generated Solutions Using Spreadsheets
Writing Business Decision Modeling Reports for Business
Optimal Information Area
References
Problems
CHAPTER 2 Introduction to Spreadsheet Modeling
Business Decision Modeling in Action—Using Spreadsheet Models
Introduction
Process for Modeling
Basic Spreadsheet Modeling Concepts
Applied Spreadsheet Modeling— Goal Seek
Example 1
Business Decision Modeling throughout the Ages— A Brief History of Spreadsheet Modeling
Basic Excel Functions
Mathematical Operators
Applied Spreadsheet Modeling—Using Basic Functions
Applied Spreadsheet Modeling—Using Solver
Applied Spreadsheet Modeling—Curve Fitting
Business Decision Modeling Behind the Scenes— The RAND Corporation
Summary
Case Study—John Woo’s Cellular Connections
Interactive Case—Break-Even Analysis at SportsExchang
Summary of Key Excel Terms
Optimal Information Area
References
Problems
Appendix 2A: Introduction to Visual Basic Programming
CHAPTER 3 Probability and Statistics—A Foundation for Becoming a More Effective and Efficient Problem Solver
Business Decision Modeling in Action—A Probabilistic Medical Testing Problem
Descriptive Statistics: Graphical and Numerical Methods for Describing Data Sets
Graphical Methods of Data Description
Numerical Methods of Data Description
Painting the Full Picture—A Classroom Example
Excel Tutorial on Using histogram Tool Function
Example: Using Excel’s Data Analysis Add-In
Business Decision Modeling throughout the Ages— Gambling and Probability
Rules of Probability
The Language of Probability: Understanding the Terminology
Bayes’ Rule
Business Decision Modeling Behind the Scenes—The Story of Bayes
Probability Distributions
Probability Distributions and Standard Deviation
Alternative Distributions Used by Managers
Summary
Case Study: Slicky Lube Oil Products
Optimal Information Area
References
Problems
Appendix 3A: Probability and Statistics Review
CHAPTER 4 Decision Analysis: Building the Structure for Solving the Problem
Business Decision Modeling in Action—How Legal Decision Makers Use Decision Models
Decision Analysis: Building the Structure for Solving the Problem
Components of a Decision-Making Problem
Business Decision Modeling throughout the Ages—A Brief History of Decision Making
Decision-Making Criteria without Probability Assessments
Decision-Making Criteria with Probability Assessments
Sensitivity Analysis
Modeling, Decision Trees, and Influence Diagrams
Structuring Decision Problems
Decision Tree
Influence Diagram
Putting It All Together: A Real Estate Influence Diagram
Using TreePlan to Develop Decision Trees in Excel
Creating Decision Trees with Risk Solver Platform
Summary
Business Decision Modeling Behind the Scenes—The Story of John von Neumann
Case Study: Ibañez Produce
References
Problems
CHAPTER 5 Simulation Modeling
Business Decision Modeling in Action—The Super Flush Simulation
Simulation Modeling
Simulation Affecting Managers
Random Number Generation
Business Decision Modeling throughout the Ages— Monte Carlo Simulation
Simulation and Currency Exchange Rates
Simulation of a Queuing System
Business Decision Modeling Behind the Scenes—The Major Players and the Story Behind the Development of Monte Carlo Simulation
Risk Solver Platform Tutorial
Analyze the Results in RSP
Summary
Case Study: Steve’s Solar System
Interactive Case: Serving the Customers at Schenck’s
Optimal Information Area
References
Problems
Appendix 5A: @Risk Material
CHAPTER 6 Linear Regression Modeling
Business Decision Modeling in Action—Linear Regression Analysis at General Motors
Linear Regression Modeling
Business Decision Modeling throughout the Ages— History of Regression
Hypothesis Testing
Simple Linear Regression Equation
Business Decision Modeling Behind the Scenes— The Scientists of Regression
Multiple Regression Model
Measuring Accuracy
Lagged Variables
MS Excel Tutorial: Using Add-Ins
MS Excel Tutorial: Using Add-Ins
The Leading Causes of Job Creation in Information Technology: A Regression Analysis
Study: Kealoha’s Labor Lobby Regression
Interactive Case: Plotting Linear Trend for Ellis’ DVD Service Demand
Optimal Information Area
References
Problems
CHAPTER 7 Introduction to Forecasting
Business Decision Modeling in Action—Using Forecasting and Time Series in Stock Market Technical Analysis
Analyzing Time Series Data 430 Two Goals: Identify and Forecast
Analyzing Patterns in Time Series Data
Autocorrelation
Seasonal Adjustments
Business Decision Modeling Behind the Scenes—Business Forecasting—More Art Than Science?
Summary
Case Study: Jaqui’s Import Beers’ Sales Seasonality
Interactive Case: Forecasting Using Exponential Smoothing for Bill’s Brew Threw
Optimal Information Area
References
Problems
CHAPTER 8 Introduction to Optimization Models
Business Decision Modeling in Action—Spreadsheet Optimization Models in Use, or Why Use Spreadsheets to Optimize?
Introduction to Optimization Models
Descriptive Models: The Foundation for Optimization Models
Mathematical Programming
Mark’s Bats LP Example—The Story
Business Decision Modeling throughout the Ages— The History of Mathematical Programming
Methods of Solving LP Problems
Results and Sensitivity Analysis in Excel
Using Risk Solver Platform in Excel 518 Defining Optimization Model in RSP
A Brief Discussion of the Simplex Method
Linear Optimization Problems
The Transportation Problem: Pirate Logistics
Setting Up Solver to Find Solutions to the Pirate Logistics LP Problem
The Capital Budgeting Problem
Summary of Integer Programming
Summary of Linear Programming
Business Decision Modeling Behind the Scenes— The Development of Spreadsheet Optimization Programs
Case Study: Chris’s Capital Budgeting Ballyhoo
Optimal Information Area
Problems
Appendix 8A: Review of Graphical Solutions to Optimization Problems
CHAPTER 9 Project Management: PERT/CPM
Business Decision Modeling in Action—CPM, Project Scheduling, and Claims Litigation
Project Management: PERT/CPM
Business Decision Modeling throughout the Ages— The History of PERT/CPM
Planning, Scheduling, and Control
A PERT/CPM Example
Gantt Charts and Excel
Developing a Probabilistic PERT Network
Trade-offs within CPM: Project Crashing
Summary
Business Decision Modeling Behind the Scenes— PERT, Production Scheduling, and Filmmaking (No Pun Intended)
Case Study: Jennifer’s Prototype Palpitations
Interactive Case: Critical Path Scheduling for Samantha’s Custom Ceramics
Problems
CHAPTER 10 Introduction to Inventory Models
Definition of Inventories
Purpose of Inventories
Categories of Inventory Models
Costs of Inventories
Business Decision Modeling throughout the Ages— The History of the EOQ Inventory Model
Economic Order Quantity Model: Deterministic Inventory Modeling
Newsvendor Inventory Model: Probabilistic Inventory Modeling
Newsvendor Example: Game Programs
Inventory Control and Supply Chain Management
Business Decision Modeling in Action—ABC Inventory Analysis in Health Care
Advanced Inventory Models and Management Technology
Summary
References
Problems
APPENDIX A: Useful Information
Standard Normal Distribution Table
Student’s t Table
The F Distribution (Upper 5 Percent Points)
The Durbin-Watson Statistic Table
Writing Guide for Business Decision Modeling
Index
During his graduate work, he took time out and was employed for several years by Hughes Network Systems (HNS), in Germantown, Maryland. At HNS his responsibilities included: master scheduling, capacity planning, inventory control, and quality assurance/ISO 9000 auditing and training. HNS is a major manufacturer f electronic circuit boards, DSS satellite dishes, cellular phone and switching equipment, high speed cable modems, and network computer satellite systems.
John has been in academia for over 17 years and currently is a Professor in the Marketing and Supply Chain Management Department in the College of Business at East Carolina University, in Greenville, NC. Twice he has been awarded the ECU Scholar Teacher Award, 2004–2005 and 2009–2010. He teaches the Business Decision Modeling and Operations and Supply Chain Management courses. His research interests include: Design of Experiments, Multi-Objective Decision Making, Taguchi Methods, and Supply Chain Management Applications.
He is a member of the Institute for Operations Research and Management Science (INFORMS), the Decision Sciences Institute (DSI), the Council for Supply Chain Management Professionals (CSCMP), and the Institute for Supply Management (ISM). John has been published in INTERFACES, the Journal of Business Logistics, Quality Engineering, Quality Reliability Engineering International, the International Journal of Production Research, Industrial Management and Data Systems, the International Journal Physical Distribution and Logistics Management, Transportation Research: Part E, Computers and Operations Research, and the Journal of the Operational Research Society and in numerous INFORMS and DSI conference proceedings.
He enjoys spending his free time with his beautiful red-headed wife, Novine, and their two beautiful daughters, traveling, snow skiing, spending time with his family and old fraternity brothers, watching college football, and attempting to locate establishments that provide inexpensive food and liquid refreshment. Suggestions are always welcome!!
Updated for use with Microsoft Office Excel 2016 with an emphasis on model formulation and interpretation rather than on computer code or algorithms, Spreadsheet Modeling for Business Decisions examines the core methods used by managers in their everyday problem solving situations. This text provides the reader with a process to improve their own critical thinking, management judgment, and communication with their end-user clients.
Spreadsheet Modeling for Business Decisions focuses on five fundamental topics of quantitative business decision making and management science, making it suitable for a survey course in management science, but specific enough to satisfy upper division “elective” courses and graduate level MBA courses in quantitative methods or business decision making.
The new fifth edition of Spreadsheet Modeling for Business Decisions:
- Includes a new chapter on inventory modeling and incorporates the Analytic Solver for decision analysis, simulation, and optimization.
- Features examples, as well as exercises, that guide the reader in forming their own decision making process, understanding the output from their analysis, and communicating that analysis in written and verbal form.
- Includes an enhanced online learning package featuring: supplementary software programs, such as Analytic Solver, Treeplan, @Risk, and other add-ins for spreadsheets; integrated case studies, decision tree add-in programs, video lectures, interactive quizzes, and much more.
ISBN: 9781524939311 is a perfect bound text
ISBN: 9781524963392 is a looseleaf text
CHAPTER 1 The Art and Science of Becoming a More Effective and Efficient Problem Solver
Business Decision Modeling in Action—Algorithm? What the Heck Is an Algorithm?
The Art and Science of Using Business Decision Modeling to Become a More Effective and Efficient Problem Solver
The Business Decision Modeling Process
Business Decision Modeling throughout the Ages— A Brief History
Business Decision Modeling Behind the Scenes— The RAND Corporation
Computer-Generated Solutions Using Spreadsheets
Writing Business Decision Modeling Reports for Business
Optimal Information Area
References
Problems
CHAPTER 2 Introduction to Spreadsheet Modeling
Business Decision Modeling in Action—Using Spreadsheet Models
Introduction
Process for Modeling
Basic Spreadsheet Modeling Concepts
Applied Spreadsheet Modeling— Goal Seek
Example 1
Business Decision Modeling throughout the Ages— A Brief History of Spreadsheet Modeling
Basic Excel Functions
Mathematical Operators
Applied Spreadsheet Modeling—Using Basic Functions
Applied Spreadsheet Modeling—Using Solver
Applied Spreadsheet Modeling—Curve Fitting
Business Decision Modeling Behind the Scenes— The RAND Corporation
Summary
Case Study—John Woo’s Cellular Connections
Interactive Case—Break-Even Analysis at SportsExchang
Summary of Key Excel Terms
Optimal Information Area
References
Problems
Appendix 2A: Introduction to Visual Basic Programming
CHAPTER 3 Probability and Statistics—A Foundation for Becoming a More Effective and Efficient Problem Solver
Business Decision Modeling in Action—A Probabilistic Medical Testing Problem
Descriptive Statistics: Graphical and Numerical Methods for Describing Data Sets
Graphical Methods of Data Description
Numerical Methods of Data Description
Painting the Full Picture—A Classroom Example
Excel Tutorial on Using histogram Tool Function
Example: Using Excel’s Data Analysis Add-In
Business Decision Modeling throughout the Ages— Gambling and Probability
Rules of Probability
The Language of Probability: Understanding the Terminology
Bayes’ Rule
Business Decision Modeling Behind the Scenes—The Story of Bayes
Probability Distributions
Probability Distributions and Standard Deviation
Alternative Distributions Used by Managers
Summary
Case Study: Slicky Lube Oil Products
Optimal Information Area
References
Problems
Appendix 3A: Probability and Statistics Review
CHAPTER 4 Decision Analysis: Building the Structure for Solving the Problem
Business Decision Modeling in Action—How Legal Decision Makers Use Decision Models
Decision Analysis: Building the Structure for Solving the Problem
Components of a Decision-Making Problem
Business Decision Modeling throughout the Ages—A Brief History of Decision Making
Decision-Making Criteria without Probability Assessments
Decision-Making Criteria with Probability Assessments
Sensitivity Analysis
Modeling, Decision Trees, and Influence Diagrams
Structuring Decision Problems
Decision Tree
Influence Diagram
Putting It All Together: A Real Estate Influence Diagram
Using TreePlan to Develop Decision Trees in Excel
Creating Decision Trees with Risk Solver Platform
Summary
Business Decision Modeling Behind the Scenes—The Story of John von Neumann
Case Study: Ibañez Produce
References
Problems
CHAPTER 5 Simulation Modeling
Business Decision Modeling in Action—The Super Flush Simulation
Simulation Modeling
Simulation Affecting Managers
Random Number Generation
Business Decision Modeling throughout the Ages— Monte Carlo Simulation
Simulation and Currency Exchange Rates
Simulation of a Queuing System
Business Decision Modeling Behind the Scenes—The Major Players and the Story Behind the Development of Monte Carlo Simulation
Risk Solver Platform Tutorial
Analyze the Results in RSP
Summary
Case Study: Steve’s Solar System
Interactive Case: Serving the Customers at Schenck’s
Optimal Information Area
References
Problems
Appendix 5A: @Risk Material
CHAPTER 6 Linear Regression Modeling
Business Decision Modeling in Action—Linear Regression Analysis at General Motors
Linear Regression Modeling
Business Decision Modeling throughout the Ages— History of Regression
Hypothesis Testing
Simple Linear Regression Equation
Business Decision Modeling Behind the Scenes— The Scientists of Regression
Multiple Regression Model
Measuring Accuracy
Lagged Variables
MS Excel Tutorial: Using Add-Ins
MS Excel Tutorial: Using Add-Ins
The Leading Causes of Job Creation in Information Technology: A Regression Analysis
Study: Kealoha’s Labor Lobby Regression
Interactive Case: Plotting Linear Trend for Ellis’ DVD Service Demand
Optimal Information Area
References
Problems
CHAPTER 7 Introduction to Forecasting
Business Decision Modeling in Action—Using Forecasting and Time Series in Stock Market Technical Analysis
Analyzing Time Series Data 430 Two Goals: Identify and Forecast
Analyzing Patterns in Time Series Data
Autocorrelation
Seasonal Adjustments
Business Decision Modeling Behind the Scenes—Business Forecasting—More Art Than Science?
Summary
Case Study: Jaqui’s Import Beers’ Sales Seasonality
Interactive Case: Forecasting Using Exponential Smoothing for Bill’s Brew Threw
Optimal Information Area
References
Problems
CHAPTER 8 Introduction to Optimization Models
Business Decision Modeling in Action—Spreadsheet Optimization Models in Use, or Why Use Spreadsheets to Optimize?
Introduction to Optimization Models
Descriptive Models: The Foundation for Optimization Models
Mathematical Programming
Mark’s Bats LP Example—The Story
Business Decision Modeling throughout the Ages— The History of Mathematical Programming
Methods of Solving LP Problems
Results and Sensitivity Analysis in Excel
Using Risk Solver Platform in Excel 518 Defining Optimization Model in RSP
A Brief Discussion of the Simplex Method
Linear Optimization Problems
The Transportation Problem: Pirate Logistics
Setting Up Solver to Find Solutions to the Pirate Logistics LP Problem
The Capital Budgeting Problem
Summary of Integer Programming
Summary of Linear Programming
Business Decision Modeling Behind the Scenes— The Development of Spreadsheet Optimization Programs
Case Study: Chris’s Capital Budgeting Ballyhoo
Optimal Information Area
Problems
Appendix 8A: Review of Graphical Solutions to Optimization Problems
CHAPTER 9 Project Management: PERT/CPM
Business Decision Modeling in Action—CPM, Project Scheduling, and Claims Litigation
Project Management: PERT/CPM
Business Decision Modeling throughout the Ages— The History of PERT/CPM
Planning, Scheduling, and Control
A PERT/CPM Example
Gantt Charts and Excel
Developing a Probabilistic PERT Network
Trade-offs within CPM: Project Crashing
Summary
Business Decision Modeling Behind the Scenes— PERT, Production Scheduling, and Filmmaking (No Pun Intended)
Case Study: Jennifer’s Prototype Palpitations
Interactive Case: Critical Path Scheduling for Samantha’s Custom Ceramics
Problems
CHAPTER 10 Introduction to Inventory Models
Definition of Inventories
Purpose of Inventories
Categories of Inventory Models
Costs of Inventories
Business Decision Modeling throughout the Ages— The History of the EOQ Inventory Model
Economic Order Quantity Model: Deterministic Inventory Modeling
Newsvendor Inventory Model: Probabilistic Inventory Modeling
Newsvendor Example: Game Programs
Inventory Control and Supply Chain Management
Business Decision Modeling in Action—ABC Inventory Analysis in Health Care
Advanced Inventory Models and Management Technology
Summary
References
Problems
APPENDIX A: Useful Information
Standard Normal Distribution Table
Student’s t Table
The F Distribution (Upper 5 Percent Points)
The Durbin-Watson Statistic Table
Writing Guide for Business Decision Modeling
Index
During his graduate work, he took time out and was employed for several years by Hughes Network Systems (HNS), in Germantown, Maryland. At HNS his responsibilities included: master scheduling, capacity planning, inventory control, and quality assurance/ISO 9000 auditing and training. HNS is a major manufacturer f electronic circuit boards, DSS satellite dishes, cellular phone and switching equipment, high speed cable modems, and network computer satellite systems.
John has been in academia for over 17 years and currently is a Professor in the Marketing and Supply Chain Management Department in the College of Business at East Carolina University, in Greenville, NC. Twice he has been awarded the ECU Scholar Teacher Award, 2004–2005 and 2009–2010. He teaches the Business Decision Modeling and Operations and Supply Chain Management courses. His research interests include: Design of Experiments, Multi-Objective Decision Making, Taguchi Methods, and Supply Chain Management Applications.
He is a member of the Institute for Operations Research and Management Science (INFORMS), the Decision Sciences Institute (DSI), the Council for Supply Chain Management Professionals (CSCMP), and the Institute for Supply Management (ISM). John has been published in INTERFACES, the Journal of Business Logistics, Quality Engineering, Quality Reliability Engineering International, the International Journal of Production Research, Industrial Management and Data Systems, the International Journal Physical Distribution and Logistics Management, Transportation Research: Part E, Computers and Operations Research, and the Journal of the Operational Research Society and in numerous INFORMS and DSI conference proceedings.
He enjoys spending his free time with his beautiful red-headed wife, Novine, and their two beautiful daughters, traveling, snow skiing, spending time with his family and old fraternity brothers, watching college football, and attempting to locate establishments that provide inexpensive food and liquid refreshment. Suggestions are always welcome!!