ARE 155 Fall 1999
Excel Session #3
Richard Howitt
Graphing in Excel with
the Chart Wizard
Last time we learned how to solve a
linear program (like the one below) using Excel’s Solver.
The
problem stated below is a profit maximization problem that describes the production of chairs (x
1
) and
tables (x
2
).
Max
(
z
=
160
x
1
+
200
x
2
)
s
.
t
.
2
x
1
+
4
x
2
≤
40
.....
(
labor
)
18
x
1
+
18
x
2
≤
216
......
(
wood
)
24
x
1
+
12
x
2
≤
240
......
(
storage
)
x
1
,
x
2
≥
0
One of the things we could investigate, is how the shadow value of a constraint changes as you change the
RHS constant. This relationship is of particular economic interest, when dealing with a production problem,
since it represents the demand for a
production input. But instead, we’ll derive a supply response curve for
chairs (x
1
) by changing the objective function coefficient on x
1
and observing the change induced in the
optimal solution.
In this session, we will use a series of data points that we generate from repeated runs of our model, to plot
a curve in Excel. To do this, we will use the Chart Wizard, which is a fairly straightforward and extremely
useful analytical device.
First of all we arrange the data points that I generated from Excel into columns, so that Excel can plot them
easily.
As you can see below, these points represent the different production values I got by changing the
objective function coefficient on the variable x
1
in our model.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
ARE 155 Fall 1999
2
Excel Session #3
You can see that by increasing the price of chairs, I end up producing more of them, which is what we’d
expect of a producer’s supply response from Microeconomic theory.
This is the end of the preview.
Sign up
to
access the rest of the document.
 Spring '08
 Staff
 Economics, line graph, chart wizard, Objective Allowable Allowable, Excel Session, Allowable Allowable Coefficient

Click to edit the document details