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Lecture 03/05/08
1. LP Formulation Examples
a. Summary on Solver Usage
b. Blending Problems
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View Full Document The Steps in Implementing an LP
Model in a Spreadsheet
1
.
Organize the data on the spreadsheet.
2.
Reserve separate cells
for each decision variable.
3.
Create a formula in a cell corresponding to
objective function.
1.
For each constraint, create a formula in a separate
cell
corresponding to LHS of the constraint.
2.
If all decision variables are nonnegative, the
Assume
NonNegative box should be checked in
the Solver’s Option window.
How Solver Views the Model
•
Target cell  cell representing the
objective function
•
Changing cells 
represents the
decision variables
•
Constraint cells  represents the
LHS formulas
of
the constraints
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View Full Document Financial Model Formulation
Projected
Rate of Return
i
Investment
(%)
1
Atlantic Oil
7.3
2
Pacific Oil
10.3
3
Midwest Steel
6.4
4
Huber Steel
7.5
5
Government bonds
4.5
Definition of decision variables
Let x
i
= fraction of available funds allotted to investment i (i=1,2.
.,5)
Objective Function:
Maximize annual yield = .073x
1
+.103x
2
+.064x
3
+.075 x
4
+.045 x
5
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This note was uploaded on 04/17/2008 for the course CSA 273 taught by Professor Patton during the Spring '08 term at Miami University.
 Spring '08
 Patton

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