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27C0100Tools for Business Decisions
Exercise guidelines
• Exercises are due always on the following Monday– Return the exercises to the box on the first floor in Chydenia
• Working in pairs is recommended• Do not return just printouts of Excel sheets, report your results
• Please use English in your answers– You can answer in Finnish if you feel like it
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DifficulOes with exercises?
• Excel has a quite comprehensive help system with examples on how different things work
• Google is your friend (or go to kyweb forums, or form a Facebook group…)
• [email protected] will help• [email protected] will also help
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Case 1 – Merton Truck Company
• Due February 4th, 2010
• Available in the course binder
• Return to the box on 1st floor at Chydenia
• Report your results, do not hand in just a printout of Excel sheets
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The Zen of Modeling in Excel
1. Start formulaOon with pen and paper– The 2-‐dimensional table in Excel will narrow your
thinking2. Remember to separate data and formulas– You will thank yourself for doing that when you start
hunOng for mistakes3. FormulaOng the problem will take most of your
Ome– Fixing problems with the model will take the rest.
Solving takes just fracOons of seconds.
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Spreadsheet error ratesStudy Number of
spreadsheetsNumber with errors
Percentage with errors
Coopers & Lybrand, 1997KPMG, 1997Lukasic, 1998Butler (HMCE), 2000
23 21 91%22 20 91%2 2 100%7 6 86%
Total 54 49 91%
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• Other studies show that the error rate per cell is between 0.38% and 21%
• The probability of an individual spreadsheet containing an error is between 78% and 97%
• Public horror stories at: hjp://www.eusprig.org/stories.htm
• The following examples are available as an Excel file at hjp://bit.ly/lbd1001
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MarkeOng Research
A client has asked to conduct 1000 interviews to ascertain consumer reacOon to a recently marketed product. The contract with the client requires to interview:1. At least 400 households with children2. At least 400 households without children3. Evening interviews should be at least as many as day
interviews4. At least 40% of the interviews for households with
children would be conducted in the evening5. At least 60% of the interviews for households without
children would be conducted during evening
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MarkeOng Research
• Different type of interviews vary in cost• What is the interview plan that would saOsfy customer requirements at minimum cost?
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Household Cost / InterviewCost / InterviewHouseholdDay Evening
W children 20 € 25 €
w/o children 18 € 20 €
Product Mix
Floataway Tours has 420 000 € that may be used to purchase new rental boats for hire during the summer. The boats can be purchased from two different manufacturers. Floataway Tours would like to purchase at least 50 boats and would like to purchase same number of boats from Sleekboat as from Racer to maintain goodwill. At the same Ome, Floataway Tours wishes to have a total seaOng capacity of at least 200.PerOnent data concerning the boats are summarized on
the next slide. Formulate this problem as a linear program.
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Floataway ToursBoat Builder Cost Maximum
seaOngExpected daily profit
Speedhawk Sleekboat 6000 € 3 70 €
Silverbird Sleekboat 7000 € 5 80 €
Catman Racer 5000 € 2 50 €
Classy Racer 9000 € 6 110 €
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Blending Problem
Frederick’s Feed Company receives four raw grains from which it blends its dry pet food. The pet food adverOses that each 0,5 kg can meets the minimum daily requirements for vitamin C, protein and iron. The cost of each raw grain as well as the vitamin C, protein and iron units per kg of each grain are summarized on the next slide.Frederick’s is interested in producing the 0,5 kg
mixture at minimum cost while meeOng the minimum daily requirements of 6 units of vitamin C, 5 units of protein and 5 units of iron.
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Frederick’sGrain Vitamin C units/
kgProteinunits/kg
Ironunits/kg
Cost€/kg
1 9 12 0 0,75
2 16 10 14 0,90
3 8 10 5 0,80
4 10 8 7 0,70
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