Spreadsheet Modeling
& Decision Analysis
A Practical Introduction to Business
Analytics
8th edition
Cliff T. Ragsdale
05/14/2022 School of Business, MUST 1
, Chapter 3
Modeling and Solving LP
Problems in a Spreadsheet
What is a “Computer Model”?
A set of mathematical relationships and
logical assumptions implemented in a
05/14/2022 School of Business, MUST 2
, computer as an abstract representation of a
real-world object of phenomenon.
Spreadsheets provide the most convenient
way for business people to build computer
models.
Characteristics of Models
Models are usually simplified versions of the
things they represent
05/14/2022 School of Business, MUST 3
, A valid model accurately represents the
relevant characteristics of the object or
decision being studied
Categories of Analytical Models
Independent Analytic
Category Form of f(.) Variables Techniques
Prescriptiveknown, known or under LP, Networks, IP, well-
defineddecision maker’s CPM, EOQ, NLP, control GAs, GP,
MOLP
Predictive unknown, known or under Regression Analysis,
ill-defined decision maker’s Time Series Analysis,
05/14/2022 School of Business, MUST 4
& Decision Analysis
A Practical Introduction to Business
Analytics
8th edition
Cliff T. Ragsdale
05/14/2022 School of Business, MUST 1
, Chapter 3
Modeling and Solving LP
Problems in a Spreadsheet
What is a “Computer Model”?
A set of mathematical relationships and
logical assumptions implemented in a
05/14/2022 School of Business, MUST 2
, computer as an abstract representation of a
real-world object of phenomenon.
Spreadsheets provide the most convenient
way for business people to build computer
models.
Characteristics of Models
Models are usually simplified versions of the
things they represent
05/14/2022 School of Business, MUST 3
, A valid model accurately represents the
relevant characteristics of the object or
decision being studied
Categories of Analytical Models
Independent Analytic
Category Form of f(.) Variables Techniques
Prescriptiveknown, known or under LP, Networks, IP, well-
defineddecision maker’s CPM, EOQ, NLP, control GAs, GP,
MOLP
Predictive unknown, known or under Regression Analysis,
ill-defined decision maker’s Time Series Analysis,
05/14/2022 School of Business, MUST 4