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Modeling with Spreadsheets

Weekly Wage Computation


Employee Code Hours worked during the week Basic wage (Rs./Hr) (specific to the employee) Number of pieces produced Standard Rate of production in number of pieces per hour (10 pieces/hour) Extra Pay for each piece produced over and above the standard production (5 rs. per piece)

Faculty Compensation
Teaching Min Max 100 200 Research 80 120 Administration 20 50

The minimum and maximum points that can be earned by the faculty members at WIMCI during a given year for the purpose of additional compensation have been shown in the table above. In case there is a shortfall (below the minimum) in any of the categories, it can be compensated with an excess in other component in the ratio 2:1 (2 extra points in one component is equivalent to 1 deficit point in the other. The payment is set at Rs. 5000 for the total points earned by the faculty. No money is deducted if the total points is negative.

Break Even Analysis


Plan A
Sales Price

Plan B

Sales price = Rs. 25 /unit

Cost Structure

Raw material cost / unit =Rs. 15 Utilities cost / unit =Rs. 5 Rent =Rs. 60000 per year Salaries=Rs. 200000 per year Advertising Expenditure =Rs. 80000 per year Misc. Fixed Costs= Rs.20000 per year = 0 if Sales <20000 = Re. 1 / unit for sales beyond 20000 =0 if Sales <20000 = Re. 0.6 / unit for sales beyond 20000 up to 60000 = Re. 1.5 / unit for sales beyond 60000

Commission

Find the break-even volumes for the two sales plans

Sensitivity Analysis
A supplier of an item needs to incorporate the information given in the following table while making decisions for the next quarter.
Selling Price per item (P) Demand in units (D) P D= 65000- 9000*P

Per Unit Cost (c) Fixed Cost (F)

c 45000

He believes that the selling price of the item (P) can vary between 3 and 5 while the cost per unit(c) can vary between 0.45 and 1.25, during the next quarter. Perform a sensitivity analysis using spreadsheet, which shows the variation of total profit with the values of selling price (P) and unit cost(c),

Spreadsheet
Profit

Selling Price (P)


3 0.45 0.5 0.55 0.6 Unit cost (c) 0.65 0.7 0.75 0.8 0.85 0.9 0.95 1 1.05 1.1 1.15 1.2 1.25 3.25 3.5 57175 53825 50475 47125 43775 40425 37075 33725 30375 3.75 58125 55000 51875 48750 45625 42500 39375 36250 33125 4 57950 55050 52150 49250 46350 43450 40550 37650 34750 4.25 56650 53975 51300 48625 45950 43275 40600 37925 35250 4.5 54225 51775 49325 46875 44425 41975 39525 37075 34625 4.75 5

51900 55100 50000 53312.5 48100 51525 46200 49737.5 44300 47950 42400 46162.5 40500 44375 38600 42587.5 36700 40800 34800 39012.5 32900 37225 31000 35437.5 29100 33650 27200 31862.5 25300 30075 23400 28287.5 21500 26500

50675 46000 48450 44000 46225 42000 44000 40000 41775 38000 39550 36000 37325 34000 35100 32000 32875 30000

55500 56562.5 52150 53437.5 48800 50312.5 45450 47187.5 42100 44062.5 38750 40937.5 35400 37812.5 32050 34687.5

56500 55312.5 53600 52637.5 50700 49962.5 47800 47287.5 44900 44612.5 42000 41937.5 39100 39262.5 36200 36587.5

53000 49562.5 45000 50550 47337.5 43000 48100 45112.5 41000 45650 42887.5 39000 43200 40662.5 37000 40750 38437.5 35000 38300 36212.5 33000 35850 33987.5 31000

Break Even Analysis: Advertising Expenditure


Find the break-even volumes in the BE problem when the assumption of advertising expenditure being independent of sales is relaxed. The actual relation between the two is specified below:
Sales Volume 0-29999 Advertising Expenditure 5000

30000-59999
60000-79999 80000-89999 >=90000

10000
30000 60000 90000

Computing Grades
Prepare a spreadsheet to compute the grades of a class of CCBMDO students given their marks.

All Unit Discount


A company has purchased several products from its supplier in a month. In all, there are four different types of products, P1, P2, P3 and P4. If the quantity of purchase is greater than or equal to a certain threshold value then a certain percentage of discount is available on all units purchased. For each product type the unit price, the threshold quantity for discount and the percentage discount are given. Prepare a spreadsheet for the same.

Spreadsheet

Quantity Discount with Price Breaks


Demand/ Year = 1092 units Ordering cost/order= 20 Rs./order Unit cost per item(all items in an order):
100-399 400-899 900+ 3.2 2.976 2.88

Total Inventory carrying cost = 0.125*Order Quantity*Unit cost/item What is the optimal order quantity?

Customer level discount


Wholesaler of a given item provides an all unit discount on purchase of large quantities of a given item. A discount of 5% is offered on the total purchase price if the purchased quantity exceeds 1000 units. A discount of 7.5% on the total purchase price is offered if the purchase quantity is more than 2000 items in a given order (Range G2:H5). The wholesaler provides an additional discount on the bill amount to its long time customers (C100, C200, C300) over and above the quantity discounts (Range B3:E4). The unit price of the item is $5. Prepare a spreadsheet that will give the total bill amount to be charged to a given customer given the customers number and quantity purchased by him/her.

Spreadsheet

Customer level discount


Now suppose that the product price changes due to market fluctuations. How will you incorporate the fluctuations in price in the above worksheet without affecting the previous transactions, which have already happened (remember that the worksheet is dynamic so any change made in the price now (Cell C1) will change the values of all the previous transactions too, which happened at a different price)?

Distance Matrix
The distance between two US cities can be approximated by formula: 69* [(lat1-lat2) 2 +(long1-long2) 2] . Enter the formula in the cell B11 that will give the distance between two cities.

Baseball Players
The list of top baseball players in the world and their salaries has been provided to you. Use the spreadsheet to find the players with the highest and the fifth highest salaries without using the VLOOKUP function.
Highest Name S.No 1 2 3 4 5 6 7 8 9 Name Salary dl-Mo Vaughn 13166667 Tim Salmon 5683013 Garret Anderson 4500000 Darin Erstad 3450000 Troy Percival 3400000 Ismael Valdes 2500000 Pat Rapp 2000000 Glenallen Hill 1500000 Troy Glaus 1250000 5th highest

Birthday Lists
I have two lists of people who are invited to my brothers birthday. I want to find out which people are present on : a. both the lists b. List 1 c. List 2

Shipment Costs
Compute the total cost of shipping for the following problem assuming the shipping cost per unit per kilometer as Rs.5.
Warehouse No. City No. 2 C 2 D 1 C 1 B 4 B 5 A Distances(km) A 12 10 5 18 27 Cities B 10 16 30 22 17 C 15 17 22 17 16 D 20 25 28 16 20 Quantity (Unit) 100 200 150 75 35 40

1 2 3 4 5

Warehouses

Loans
The annual rate your bank charges you to borrow money for 1, 5, 10, or 30 years is shown in the following table.
Duration of Loan Annual Loan Rate 1 6 5 7 10 9 30 10

If you borrow money from the bank for any duration from 1 through 30 years thats not listed in the table, your rate is found by interpolating between the rates given in the table. For example, lets say you borrow money for 15 years. Because 15 years is one quarter of the way between 10 years and 30 years, the annual loan rate would be calculated as follows: (1/4)*9 + (3/4)*10 =9.25%. Write a formula that returns the annual interest rate on a loan for any period between 1 and 30 years.

Incremental Discount
Assume that items are bought from a supplier who gives incremental discounts on orders.
Slab 0-199 200-499 500-799 800-999 1000-1099 1100-1299 1300-1499 1500+ Price 5 4.8 4.6 4.4 4.2 4 3.8 3.6

Can you tell what is the average price you paid per item if the order size is 1200?

Scheduling Problem
A small pharmaceutical company wants to design a spreadsheet for its scheduling purposes. Currently it makes 8 kinds of tablets and the main constraint in the production is with the granulation department .The following table shows the details of the processing times per batch for the various tablets at the granulation stage. After one batch is complete a minor cleaning operation is required for cleaning up the equipment, before the next batch of the same product is processed. If a batch of a different product is processed then one requires performing a major cleaning operation. Currently the department runs in, what is called as, a campaign mode. In a campaign mode, a certain number of batches of a given product are processed one after the other. This helps in reducing the major cleaning time up to a great extent (as only a minor cleaning operation is required during the changeover between the two consecutive batches of the same product). However, after 5 consecutive batches of a given product, one requires a major cleaning operation before one starts the processing of the 6th consecutive batch. If the production sequence for the plant for the next few days has been given along with the batch sizes to be produced, then, using the spreadsheet, calculate the makespan (time of completion of the last activity) for the given production sequence.

Working With Data


CCBMDO Data

Database Functions
Make-up Data
1. How many dollars worth of lip-gloss did Jen sell? 2. What was the average number of lipstick units sold each time Jen had a sale in the East region? 3. What was the total dollar amount of all makeup sold by Emilee in the East region? 4. How many dollars worth of lipstick did Colleen or Zaret in the East region sell? 5. How many lipstick transactions were not in the East region? 6. How many dollars worth of lipstick did Jen sell during 2004? 7. What is the total dollar amount each salesperson sold of each makeup product?

References

Special Edition Using Micrsoft Office Excel 2007 1/e (Bill Jelen) Quantitative Business Methods using Excel (Whingham, David, 1998) Spreadsheet through examples (Excel Version) (V. Venkata Rao, IIM Ahmedabad) Microsoft Excel 2010 Data Analysis and Business Modeling (Wayne Winston) Monte Carlo Simulation in Excel without using Add-Ins ( Richard Ivey School of Business) Excel models for Business and Operations Management ( John F. Barlow)

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