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Modelling With Spreadsheets

Spreadsheets allow users to enter data that can then be modeled and analyzed through the use of formulas. Formulas calculate values in cells based on data in other cells and allow the automatic recalculation of results when data changes. This enables users to conduct "what if" analysis by changing variable values to predict outcomes. Some key advantages of spreadsheets are more flexible data handling and presentation, the ability to instantly recalculate results, and use as a modeling tool to answer questions about how changes to variables might impact outcomes.

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Giacomo
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146 views

Modelling With Spreadsheets

Spreadsheets allow users to enter data that can then be modeled and analyzed through the use of formulas. Formulas calculate values in cells based on data in other cells and allow the automatic recalculation of results when data changes. This enables users to conduct "what if" analysis by changing variable values to predict outcomes. Some key advantages of spreadsheets are more flexible data handling and presentation, the ability to instantly recalculate results, and use as a modeling tool to answer questions about how changes to variables might impact outcomes.

Uploaded by

Giacomo
Copyright
© © All Rights Reserved
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Modelling with spreadsheets

Computer models of mathematical data, such as budgets, are usually done


using a spreadsheet application that processes and performs calculations on
the data entered by the user. For example, a computer model of a school's
budget might show that the school will run out of money before the end of
the term if it hires an extra teacher.

How spreadsheets work


A spreadsheet appears as a grid, each row has its own number and each column its
own letter. This labelling of rows and columns is used to give each cell a cell address
or reference, for example, C5 means column C, row 5.
It is also possible to refer to a range of cells collectively, ie E4:E12 includes E4, E12
and all of the cells in-between.
Cells can contain numbers, text or formulae.

Example spreadsheet
A grocer uses a mobile shop to sell groceries to customers who live out of town. He
uses a spreadsheet to keep a record of his daily sales:

Daily sales
A

Produce

Unit

Number sold

Price

Sales

Apples

kg

0.70

4.90

Potatoes

25kg

6.00

48.00

Oranges

kg

0.90

5.40

Carrots

25kg

8.50

68.00

Sprouts

kg

1.40

5.60

Cabbage

kg

0.70

4.20

10

Onions

kg

0.56

5.04

Total

141.14

11
12

There are a number of formulae in the above spreadsheet but they're hidden; only
the results are displayed.

Formulae
The formula in cells E4 to E10 works out the total value of sales for each item. It
does this by multiplying the number sold by the individual price. For example, seven
kilograms of apples were sold at 70p per kilogram; the sales total is calculated as
4.90 and is displayed in the cell E4. The formula in E4 is =C4*D4, i.e. 7 0.70.
Cell E12 contains a formula that calculates the total value of the sales column. The
formulae used is =SUM(E4:E10). This formula includes cells E4, E10 and all of the
cells in-between. You could write it =E4+E5+E6+E7+E8+E9+E10 which will give
the same result but is overly complex and leaves more room for mistakes. Note, the
=SUM function should only be used when adding a range of cells.

Constructing a spreadsheet
A self-employed builder charges 15.00 an hour. He's constructed a spreadsheet to
keep a record of his work but it's incomplete.

Complete the builder's spreadsheet


Document
Download the builder's incomplete spreadsheet.
Open the spreadsheet here
Download the incomplete spreadsheet on the left and perform the tasks below. To
open it you will need a spreadsheet application, eg Microsoft's Excel,
OpenOffice.org's Calc, Google Docs or another application that can open *.xls files.
Please note that the actual steps required to complete each tasks may differ slightly
depending on the spreadsheet application you're using.

Task 1
The builder has just completed some work for Jason Williams. It took him four
hours and the materials cost 37.00.

1.

Enter Jasons information into the spreadsheet.

The formulae to calculate the bill should be automatically inherited from the cell
above.

Task 2

Changing the category to currency


The values stored in columns C and D are currency. Change the number category to
currency so the spreadsheet recognises this.

1.

Click cell C2 and hold down the left mouse button. Move the cursor across
to cell D2 and then down to cell D6. The cells should now be highlighted.

2.

Release the left mouse button and right-click on a highlighted cell. Click
Format Cells.

3.

A new screen appears, click the Number tab and click currency in the list.

4.

Click OK.

Task 3

Theres a mistake in the formula used to calculate the total bill, the builder has
entered his hourly rate incorrectly correct his mistake (remember, his hourly rate is
15).

1.

Double-click cell D2 to edit the formula. Make the correction and press
enter on the keyboard to save the changes.

2.

Copy the changes to the formula to the cells below. Click cell D2, left-click
the small black square in the bottom right corner and drag it down to cell D6.
Release the left mouse button.

Task 4

You can select specific cells to use in your formula


The builder wants to calculate his daily earnings, write a formula in cell D8 to do this
for him. Press enter to save the changes.
The formula can be written two ways, decide which one to use:

1.

=D2+D3+D4+D5+D6

2.

=SUM(D2:D6)

The spreadsheet program should realise youre adding together currency and
automatically change cell D8s number category to match.

Document
Download the builder's completed spreadsheet.
Open the spreadsheet here
Download the completed spreadsheet on the left to see how you did or to learn
where you went wrong.

Advantages of using spreadsheets


Using a spreadsheet rather than a calculator or pen and paper offers the following
advantages:

More effective data handling

Formulae can be used to instantly recalculate totals. For example, if the


builder changed his call-out charge, the total cost would be instantly recalculated
taking the change into account.

You can carry out "what if?" investigations. For example, the grocer could
increase his prices to see the effect on sales and the builder could increase his
hourly charge to see the effect on his daily total.

The information can be presented in different ways. For example, the


grocer could produce a graph of fruit and vegetable sales by choosing the ranges
A4:A10 and E4:E10 in order to make the graph.

It is easy to make these changes, save your work and print it out again.
More flexible presentation

Alter column widths and easily delete or add columns and rows.

Underline, embolden text and use different fonts and graphics.

Justify your data to the left, centre or right.

Control the types of numbers you enter - for example you can choose
percentage, currency or set the number of decimal places.

Modelling: what if?


A spreadsheet can be used as a modelling tool.
The model is controlled by a set of rules introduced by formulae. These rules can be
changed easily to vary the model and, for example, provide information about
running costs and profit margins.
A company could use a spreadsheet to find out what would happen if they reduced
the price of their product, and the effect it would have on their income from sales. To
do this they lower the value in the price column and the data in the income from
sales column will be automatically recalculated (downwards). If the lower price

resulted in higher sales, by adjusting the data in the number of sales column, the
income from sales data will again be recalculated (upwards).
Being able to answer "what if?" questions like this is vital and allows a company to
predict future trends in its income and outgoings.

Why use computer models?


As well as financial modelling, spreadsheet software can be used for many other
kinds of computer model:

modelling supermarket queues

modelling the stresses which will be borne by a new bridge

modelling traffic flow in a new road system


Computer models are cheaper to setup than alternative methods that could be used
to predict what will happen in a system, eg building a prototype. Other benefits
include being able to:

make alterations and quickly see the outcomes

repeat tests several times over

learn from "what if?" scenarios

model dangerous situations safely


Limitations of computer models
A model is only as good as the rules used to create it. A mistake could have been
made by whoever wrote the model and not every situation might have been
considered both of these issues could cause the model to give incorrect answers.

http://www.bbc.co.uk/schools/gcsebitesize/ict/modelling/0spreadsheetsrev1.shtml

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