Advanced Excel Applications

Examples

Optimization (Solver) Decision Trees (Precision Tree) Statistics and Data Mining Simulation

Formulas (@Risk)Processes (SimQuick)

Idea of Simulation

Goal: Evaluate a strategy. Examples of strategies:

InvestmentsGamesProcess improvement

Technique: Build a model in the computer and test the strategy on it.

Example: Personal Investment Strategy

A company that has implemented this idea on a big scale:

www.financialengines.com

Example: The game of craps

Example: Waiting at a bank Customers arrive every 2 minutes (on average;

exp. dist.).

Histogram

0

50

100

Time between arrivals

Freq

uenc

y

Customers enter a single line. There is a single teller; service takes 2.4

minutes on average (normal dist. with a st. dev. of .5 minutes).

SimQuick software

SimQuick model for bank

SimQuick output

Process improvement ideas

Add a second teller. Speed up the single teller with some

automation.

Other applications of simulation

Queueing systems Call centers Logistics systems Computer networks Financial analysis Health care systems

Simulation with animation

An on-line example

Plug

If you’re interested in these types of applications there is a course devoted to them:

Business Applications on Spreadsheets MGTI 473