Excel-Solver-1 - BMGT301 Spring 2012 Decision Making Using...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
BMGT 301: INTRODUCTION TO INFORMATION SYSTEMS SPRING 2012 BMGT301 Spring 2012 Decision Making Using Excel's Solver In this exercise we will learn about how to use Spreadsheets for business decision making. For illustrative purposes, we will use the following example. Example: A firm manufactures two types of markers -- dry erase and permanent. Each is made from the following components: ink and plastic. A dry erase marker requires 0.1 fl. oz. of ink, 0.8 oz. of plastic and sells for $0.25. A permanent marker requires 0.25 fl. oz. of ink, 1 oz. of plastic and sells for $0.40. The firm has 5000 oz. of plastic and 1000 fl. oz. of ink available. All markers manufactured will be sold. How many of each type of marker should the firm manufacture to maximize their revenues? The major requirements are: (a) The firm must have a well defined objective to achieve. For instance, in our example, the firm wishes to maximize its revenues. What are some alternative objectives? (b) There must be more than one alternative course of action . Each course of action is represented by a set of different values for the decision variables of the problem . (c) The objective of the firm, and the limitations (constraints) it faces (in our example, caused by the limited supply of its resources), must be expressible as mathematical equations or inequalities , and these are typically linear equations or inequalities. Setting up a linear program Here's good sequence of steps for setting up a linear program. (a) Identify the parameters of the problem. A parameter is simply a factor whose value affects the decision to be made. The parameters of our example are listed in the table on the next page: Parameter Value 1. The price of a dry-erase marker $ 0.25 2. The price of a permanent marker $ 0.40 3. Plastic needed to make a dry-erase marker 0.8 oz.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 4. Plastic needed to make a permanent marker 1 oz. 5. Ink needed to make a dry-erase marker 0.1 fl. oz. 6. Ink needed to make a permanent marker 0.25 fl. oz. 7. Amount of plastic the firm has 5000 oz. 8. Amount of ink the firm has 1000 oz.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern