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Lecture 1
Lecture 1
Lecture 1
INTRODUCTION TO SPREADSHEET
BUSINESS MODELING
1
AGENDA
Course outline
Mathematical models to aid decision making
Basic spreadsheet skills
2
MANAGERIAL DECISION MAKING
Analysis
Model Results
Symbolic
Interpretation
Abstraction
World
Managerial
Real Judgment
World
Management Intuition
Decisions
Situation
3
A SCIENTIFIC APPROACH
Recommend an Alternative
4
EXAMPLE
You operate a bakery and need to determine advertising expenses for November and
December.
Previous years’ experience tells you that the monthly demand is correlated with the
monthly advertising expenditure. The effectiveness of advertising depends on the
month: Demand
6
ELEMENTS OF MODELS
7
DECISIONS, OUTCOMES, DATA - EXAMPLE
Net income
Revenue Cost
9
Monthly
advertising
expense
STRUCTURE OF MODEL - EXAMPLE
10
SPREADSHEET MODEL
Outputs
Our goal
Calculation
11
SPREADSHEET MODEL
12
BEST PRACTICE GUIDELINES IN SPREADSHEET
DESIGN