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    DA3 - Applying Excel Solver

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    vy.ngo23005696

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    DA3 - Applying Excel Solver

    Uploaded by

    vy.ngo23005696
    2 views26 pages

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    DA3_Applying Excel Solver

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    2 views26 pages

    DA3 - Applying Excel Solver

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    vy.ngo23005696

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    Applying Excel

    Solver for
    Optimization Case
    DA9

    Presented By:
    Thao Vy - 23005696
    Agenda
    1. Background
    2. What is Excel Solver?
    3. How to add Solver in Excel?
    4. Formulating LP Model
    5. Using Excel Solver
    Maximize profit

    Business
    Linear Minimize costs

    Programming-
    Optimization Maximize ROI

    Quy hoạch tuyế n tính

    Optimization is
    Linear
    an interesting
    Programming
    aspect in many

    industries
    What is Excel Solver

    Belongs to a special set of commands often


    referred to as What-if Analysis Tools

    It is primarily purposed for simulation and


    optimization of various business and
    engineering models

    Especially useful for solving linear programming


    problems, aka linear optimization problems, and
    therefore is sometimes called a linear programming
    solver
    How to add Solver in Excel?
    For Excel 2010, Excel 2013, Excel 2016
    Let’s figure out some
    components of Excel Solver

    Objective
    Variable Cells
    Cells Constraints

    Cells that contain The cell containing a Restrictions or limits of


    variable data that can be formula that represents the possible solutions to
    changed to achieve the the objective, or goal, of the problem
    objective the problem

    e.g. No. of products sold e.g. Maximized Profit, e.g. Constraint on


    to achieve highest profit Lowest Cost materials stock
    Formulating LP Model

    01 Understand problem

    02 Identify the decision variables

    03 Identify the objective function

    04 Identify the constraints

    Identify any upper or lower bounds on the


    05 decision variables
    Example 1:
    Product Mix Problem
    Blue Ridge Hot Tubs makes two hot tubs the Aqua-Spa
    and the Hydro-Lux (say, A and B)
    Each unit of A requires 9 hours of labor and 12 feet of
    tubing, 1 pump.
    Each unit of B requires 6 hours of labor and 16 feet of
    tubing, 1 pump.
    A company only have 1,566 production labor hours and
    2,880 feet of tubing, 200 pumps available.
    The profit per unit of A and B are $350 and $300
    respectively.

    Q: How many A and B should produce to


    maximize profits during the next production
    cycle?
    Formulating LP Model
    01 Understand problem

    How many product A


    and B should produce to maximize
    profit, while using no more than
    200 pumps, 1,566 labor hours, and
    2,880 feet of tubing?
    Formulating LP Model
    02 Identify Variable Cells

    Let X1 represent the number


    of A to produce and X2
    represent the number of B to
    produce.
    Formulating LP Model
    03 Identify Objective Function

    Earns a profit of $350 on each A (X1) and $300 on


    each B (X2) they sells. Thus, Company’s objective
    of maximizing the profit he earns is stated
    mathematically as:

    MAX:
    Formulating LP Model
    04 Identify The Constraints

    The constraint on the number of pumps:

    The constraint on the number of labor hours:

    The constraint on the number of feet of tubing:


    Formulating LP Model
    05 Identify upper or lower bounds on the decision variables

    It is impossible to produce a negative number


    of hot tubs. Therefore, the following two
    constraints also apply to this problem:
    Formulating LP Model
    The complete LP model can be stated as:
    Formulating LP Model
    Plot the constraints for the problem and identify its
    feasible region
    Using Excel Solver

    Reserve separate cells in the spreadsheet to


    01 represent each decision variable.

    Create a formula in a cell in the spreadsheet that


    02 corresponds to the objective function.

    For each constraint, create a formula in a separate


    03 cell in the spreadsheet that corresponds to the left-
    hand-side (LHS) of the constraint.
    Using Excel Solver
    A spreadsheet model for the product mix problem
    Using Excel Solver
    Using Excel Solver
    Solving Method

    Generalized Reduced Gradient (GRG) Nonlinear - Default


    Best For: Nonlinear problems.

    Simplex LP:
    Best For: Linear problems.

    Evolutionary:
    Best For: Complex and non-smooth nonlinear problems.
    Using Excel Solver
    Using Excel Solver
    Type of Report
    Answer
    Type of Report
    Sensitivity
    Type of Report
    Limits
    Thank
    You!

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