Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 34 views

    EXCEL

    Uploaded by

    Karthika Marthandan

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    EXCEL

    Uploaded by

    Karthika Marthandan
    34 views5 pages

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    34 views5 pages

    EXCEL

    Uploaded by

    Karthika Marthandan

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    Exercise No.

    28

    INVENTORY MODELS USING EXCEL


    Aim:
    To calculate the EOB (Economic order batch size).
    Example:
    A computer manufacturing plant produces 10,000 servers per year. The cost to produce each server is
    $2,000. The cost to set up a production run of servers is $200, and the cost to hold a server in inventory for a
    year is $500. The plant can produce 25,000 servers per year if it wants to. When the plant produces servers, how
    large a batch should it produce?

    Procedure:

    Step 1:
    To enter into MS-Excel Sheet, Use the command
    Start Programs MS office MS Excel.

    Step 2:
    Type this example of Column A values into a new spread sheet; to calculate the EOB (Economic order
    batch size)

    Note:
    √ 2 KDR
    h(R−D)

    K = Cost of setting up a batch for production


    h = Cost of holding each unit in inventory for a year
    D = Annual demand for the product
    R = Annual rate at which the product can be produced. For example, IBM might have the capacity to
    produce 25,000 servers per year.

    From this formula, we find the following:

     An increase in K or D will increase the EOB.


     An increase in h or R will decrease the EOB.

    K = $200, h = $500, D = 10,000 units per year, and R = 25,000 unit per year.

    Step 3:
    Enter the parameter values in the cell range C2:C5, calculate the EOB.

    G15 = 2 * G10 * G12 * G13 {2KDR}

    H15 = G11 * (G13 – G12) {h(R - D)}

    I15 = G15 / H15

    G14 = SQRT (I15) = 115.47


    OUTPUT:

    RESULT:

    The batch size that minimizes cost is 115.47 computers. Thus, we should produce 115 or 116
    computers in each batch.
    Exercise No. 17
    PORTFOLIO SELECTION
    Aim:
    To use linear programming to create the maximum returns portfolio using MS-Excel.
    Problem formulation of a portfolio selection problem as a linear program is as follows:
    Maximize r1x1 + r2x2 +r3x3 (Maximum – return objective)
    Subject to

    β 1 x1 + β2x2 + β3x3 = 1.1 (fixed beta for the portfolio)


    x1 + x2 + x3 = 1 (proportions should add up to 1)
    x1,x2,x3>=0. (No short-selling)
    Procedure:
    Step 1:
    To enter into MS-Excel Sheet, Use the command
    Start Programs MS office MS Excel.

     Create a blank workbook or worksheet.


     Type this assumption example for calculating portfolio selection.

    Step 2:
    In Excel, create a worksheet that presents the three beta coefficients, the three rates of return, three trial
    properties values, the objective function, the total beta constraint, and the total proportion constraint.

    Step 3: Invoking Solver


    Excel: Select File > Options. On the left panel, select Add-ins. On the right panel, next to Manage Add-
    Ins, click on Go. The Add-Ins list will pop up. Put a checkmark next to Solver Add-in and click OK. Solver will
    appear as a menu selection under the Data tab.

    Step 4:
    Filling out the Solver dialog box.
    Fill-in all the necessary information in the Solver dialog box as follows:
    1. Set the target equal to the cell that contains the total return,
    2. Specify Max as the type of objective,
    3. Specify the cells containing the proportion values as Changingcells,
    4. Click Add to add the three constraints,
    5. Select Simplex LP as the Solving Method,
    6. Click on Solve to get the solution.
    7. After execution is complete, select to Keep the Solver Solution.

    Step 5:
    Excel will revise the proportions in column J, and the total return in K13.

    Choose the report type Answer, Sensitivity report or Limit for final result, save the file and Click Ok.
    OUTPUT:
    RESULT:

    These correspond to the proportions that maximize the total return (optimal solution), and the
    maximize return (optimal value).

    You might also like