Spreadsheet Modeling for Business Decisions

Author(s): John F Kros

Edition: 5

Copyright: 2016


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Updated for use with Microsoft Office Excel 2016 with an emphasis on model formulation and interpretation rather than on computer code or algorithms, Spreadsheet Modeling for Business Decisions examines the core methods used by managers in their everyday problem solving situations. This text provides the reader with a process to improve their own critical thinking, management judgment, and communication with their end-user clients.

Spreadsheet Modeling for Business Decisions focuses on five fundamental topics of quantitative business decision making and management science, making it suitable for a survey course in management science, but specific enough to satisfy upper division “elective” courses and graduate level MBA courses in quantitative methods or business decision making. 

The new fifth edition of Spreadsheet Modeling for Business Decisions:

  • Includes a new chapter on inventory modeling and incorporates the Analytic Solver for decision analysis, simulation, and optimization.
  • Features examples, as well as exercises, that guide the reader in forming their own decision making process, understanding the output from their analysis, and communicating that analysis in written and verbal form.
  • Includes an enhanced online learning package featuring: supplementary software programs, such as Analytic Solver, Treeplan, @Risk, and other add-ins for spreadsheets; integrated case studies, decision tree add-in programs, video lectures, interactive quizzes, and much more.

CHAPTER 1 The Art and Science of Becoming a More Effective and Efficient Problem Solver
Business Decision Modeling in Action—Algorithm? What the Heck Is an Algorithm? 
The Art and Science of Using Business Decision Modeling to Become a More Effective and Efficient Problem Solver
The Business Decision Modeling Process 
Business Decision Modeling throughout the Ages— A Brief History  
Business Decision Modeling Behind the Scenes— The RAND Corporation 
Computer-Generated Solutions Using Spreadsheets 
Writing Business Decision Modeling Reports for Business 
Optimal Information Area 
CHAPTER 2 Introduction to Spreadsheet Modeling 
Business Decision Modeling in Action—Using Spreadsheet Models  
Process for Modeling 
Basic Spreadsheet Modeling Concepts
Applied Spreadsheet Modeling— Goal Seek
Example 1 
Business Decision Modeling throughout the Ages— A Brief History of Spreadsheet Modeling 
Basic Excel Functions
Mathematical Operators
Applied Spreadsheet Modeling—Using Basic Functions
Applied Spreadsheet Modeling—Using Solver 
Applied Spreadsheet Modeling—Curve Fitting 
Business Decision Modeling Behind the Scenes— The RAND Corporation 
Case Study—John Woo’s Cellular Connections
Interactive Case—Break-Even Analysis at SportsExchang
Summary of Key Excel Terms
Optimal Information Area
Appendix 2A: Introduction to Visual Basic Programming
CHAPTER 3 Probability and Statistics—A Foundation for Becoming a More Effective and Efficient Problem Solver
Business Decision Modeling in Action—A Probabilistic Medical Testing Problem  
Descriptive Statistics: Graphical and Numerical Methods for Describing Data Sets
Graphical Methods of Data Description
Numerical Methods of Data Description
Painting the Full Picture—A Classroom Example 
Excel Tutorial on Using histogram Tool Function
Example: Using Excel’s Data Analysis Add-In
Business Decision Modeling throughout the Ages— Gambling and Probability 
Rules of Probability
The Language of Probability: Understanding the  Terminology
Bayes’ Rule
Business Decision Modeling Behind the Scenes—The Story of Bayes  
Probability Distributions 
Probability Distributions and Standard Deviation
Alternative Distributions Used by Managers
Case Study: Slicky Lube Oil Products
Optimal Information Area
Appendix 3A: Probability and Statistics Review
CHAPTER 4 Decision Analysis: Building the Structure for Solving the Problem
Business Decision Modeling in Action—How Legal Decision Makers Use Decision Models 
Decision Analysis: Building the Structure for Solving the  Problem
Components of a Decision-Making Problem
Business Decision Modeling throughout the Ages—A Brief History of Decision Making 
Decision-Making Criteria without Probability Assessments
Decision-Making Criteria with Probability Assessments
Sensitivity Analysis
Modeling, Decision Trees, and Influence Diagrams
Structuring Decision Problems
Decision Tree
Influence Diagram
Putting It All Together: A Real Estate Influence Diagram 
Using TreePlan to Develop Decision Trees in Excel
Creating Decision Trees with Risk Solver Platform
Business Decision Modeling Behind the Scenes—The Story of John von Neumann 
Case Study: Ibañez Produce
CHAPTER 5 Simulation Modeling
Business Decision Modeling in Action—The Super Flush Simulation 
Simulation Modeling
Simulation Affecting Managers
Random Number Generation 
Business Decision Modeling throughout the Ages— Monte Carlo Simulation 
Simulation and Currency Exchange Rates 
Simulation of a Queuing System
Business Decision Modeling Behind the Scenes—The Major Players and the Story Behind the Development of Monte Carlo Simulation 
Risk Solver Platform Tutorial
Analyze the Results in RSP
Case Study: Steve’s Solar System 
Interactive Case: Serving the Customers at Schenck’s
Optimal Information Area
Appendix 5A: @Risk Material
CHAPTER 6 Linear Regression Modeling 
Business Decision Modeling in Action—Linear Regression Analysis at General Motors 
Linear Regression Modeling 
Business Decision Modeling throughout the Ages— History of Regression  
Hypothesis Testing
Simple Linear Regression Equation
Business Decision Modeling Behind the Scenes— The Scientists of Regression 
Multiple Regression Model
Measuring Accuracy
Lagged Variables 
MS Excel Tutorial: Using Add-Ins
MS Excel Tutorial: Using Add-Ins 
The Leading Causes of Job Creation in Information Technology: A Regression Analysis
Study: Kealoha’s Labor Lobby Regression
Interactive Case: Plotting Linear Trend for Ellis’ DVD Service Demand
Optimal Information Area 
CHAPTER 7 Introduction to Forecasting
Business Decision Modeling in Action—Using  Forecasting and Time Series in Stock Market  Technical Analysis  
Analyzing Time Series Data 430 Two Goals: Identify and Forecast 
Analyzing Patterns in Time Series Data
Seasonal Adjustments
Business Decision Modeling Behind the Scenes—Business Forecasting—More Art Than Science? 
Case Study: Jaqui’s Import Beers’ Sales Seasonality
Interactive Case: Forecasting Using Exponential Smoothing for Bill’s Brew Threw
Optimal Information Area
CHAPTER 8 Introduction to Optimization Models
Business Decision Modeling in Action—Spreadsheet Optimization Models in Use, or Why Use Spreadsheets to Optimize? 
Introduction to Optimization Models
Descriptive Models: The Foundation for Optimization Models
Mathematical Programming
Mark’s Bats LP Example—The Story
Business Decision Modeling throughout the Ages— The History of Mathematical Programming 
Methods of Solving LP Problems
Results and Sensitivity Analysis in Excel
Using Risk Solver Platform in Excel 518 Defining Optimization Model in RSP 
A Brief Discussion of the Simplex Method
Linear Optimization Problems
The Transportation Problem: Pirate Logistics
Setting Up Solver to Find Solutions to the Pirate Logistics LP Problem
The Capital Budgeting Problem 
Summary of Integer Programming  
Summary of Linear Programming 
Business Decision Modeling Behind the Scenes— The Development of Spreadsheet Optimization Programs 
Case Study: Chris’s Capital Budgeting Ballyhoo
Optimal Information Area
Appendix 8A: Review of Graphical Solutions to Optimization Problems
CHAPTER 9 Project Management:  PERT/CPM 
Business Decision Modeling in Action—CPM, Project Scheduling, and Claims Litigation 
Project Management: PERT/CPM
Business Decision Modeling throughout the Ages— The History of PERT/CPM  
Planning, Scheduling, and Control
A PERT/CPM Example
Gantt Charts and Excel
Developing a Probabilistic PERT Network
Trade-offs within CPM: Project Crashing
Business Decision Modeling Behind the Scenes— PERT, Production Scheduling, and Filmmaking  (No Pun Intended)  
Case Study: Jennifer’s Prototype Palpitations 
Interactive Case: Critical Path Scheduling for Samantha’s Custom Ceramics
CHAPTER 10 Introduction to Inventory Models 
Definition of Inventories
Purpose of Inventories
Categories of Inventory Models
Costs of Inventories
Business Decision Modeling throughout the Ages— The History of the EOQ Inventory Model 
Economic Order Quantity Model: Deterministic Inventory Modeling
Newsvendor Inventory Model: Probabilistic Inventory Modeling
Newsvendor Example: Game Programs 
Inventory Control and Supply Chain Management
Business Decision Modeling in Action—ABC Inventory Analysis in Health Care  
Advanced Inventory Models and Management Technology 

APPENDIX A: Useful Information
Standard Normal Distribution Table
Student’s t Table 
The F Distribution (Upper 5 Percent Points)
The Durbin-Watson Statistic Table
Writing Guide for Business Decision Modeling

John F Kros

John F. Kros has a bachelor of business administration from The University of Texas, a master of business administration from Santa Clara University, and a Ph.D. in systems engineering from The University of Virginia.

During his graduate work, he took time out and was employed for several years by Hughes Network Systems (HNS), in Germantown, Maryland. At HNS his responsibilities included: master scheduling, capacity planning, inventory control, and quality assurance/ISO 9000 auditing and training. HNS is a major manufacturer f electronic circuit boards, DSS satellite dishes, cellular phone and switching equipment, high speed cable modems, and network computer satellite systems.

John has been in academia for over 17 years and currently is a Professor in the Marketing and Supply Chain Management Department in the College of Business at East Carolina University, in Greenville, NC. Twice he has been awarded the ECU Scholar Teacher Award, 2004–2005 and 2009–2010. He teaches the Business Decision Modeling and Operations and Supply Chain Management courses. His research interests include: Design of Experiments, Multi-Objective Decision Making, Taguchi Methods, and Supply Chain Management Applications.

He is a member of the Institute for Operations Research and Management Science (INFORMS), the Decision Sciences Institute (DSI), the Council for Supply Chain Management Professionals (CSCMP), and the Institute for Supply Management (ISM). John has been published in INTERFACES, the Journal of Business Logistics, Quality Engineering, Quality Reliability Engineering International, the International Journal of Production Research, Industrial Management and Data Systems, the International Journal Physical Distribution and Logistics Management, Transportation Research: Part E, Computers and Operations Research, and the Journal of the Operational Research Society and in numerous INFORMS and DSI conference proceedings.

He enjoys spending his free time with his beautiful red-headed wife, Novine, and their two beautiful daughters, traveling, snow skiing, spending time with his family and old fraternity brothers, watching college football, and attempting to locate establishments that provide inexpensive food and liquid refreshment. Suggestions are always welcome!!

Related ISBN's: 9781524939311, 9781524943653, 9781524963392

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ISBN 9781524939311

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