spreadsheet for our product mix example in Exhibit 4.1.

The decision variables are located in

cells B13:B16. The total return (Z) is computed in cell B17, and the formula for Z is shown
on the formula bar at the top of the spreadsheet. The constraint formulas for the investment
uidelines are embedded in cells H6 through H10. For example, the first guideline
formula, in cell H6, is _D6*B13, and the second guideline formula, in cell H7,
is _D7*B13_E7*B14_F7*B15_G7*B16. (Note that it would probably have been easier just
to type the guideline formulas directly into cells H6 through H10 rather than create the array of
constraint coefficients in D6:G10; however, for demonstration purposes, we wanted to show all
the parameter values.)
As mentioned earlier, it is not necessary to convert the original model constraints into standard
form to solve this model using Excel. For example, the constraint for certificates of deposit,
could be entered in the spreadsheet in row 7 in Exhibit 4.7 as
follows. The value 1, the coefficient for could be entered in cell E7, _E7*B14 could be entered
in cell J7, and the remainder of the constraint to the right side of the inequality could be
entered as _B13_B15_B16 in cell H7. In the Solver Parameters window, this constraint is entered,
with the municipal bonds constraint, as H6:H7<_J6:J7. The fourth guideline constraint
could be entered in its original form similarly.
Solution Analysis
The solution is
Sensitivity Analysis
The sensitivity report for our Excel spreadsheet solution to this problem is shown in Exhibit 4.9.
Z = +6,818.18
x4 = +31,818.20 invested in a growth stock fund
x3 = +38,181.80 invested in treasury bonds
x2,
x2 … x1 + x3 + x4,
AN INVESTMENT EXAMPLE 123
Guideline constraints
EXHIBIT 4.8