Solving LP using Excel

OPIM 101 Management Science

OPIM 101 Management Science

Overview
Steps of the Simplex Method have been programmed in software packages

designed for linear programming problems.

Many such packages available currently. Used extensively in business and government. We will focus on Excel Spreadsheets.

OPIM 101 Management Science

 Consider the following LP:

Max 60x + 50y + 20z decision variables on subject to LHS & constants on 8x + 6y + z 48 RHS 4x + 2y + 1.5z 20 yz5 x, y, z 0

Remember to put all

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 Objective

Function

To key in a formula:
Click = formula

Recall: Objective function is function of decision variables!

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 Constraint 1
Recall: Constraints are function of decision variables too!

Click = then follow by the formula of the LHS of each constraint.

OPIM 101 Management Science

 Solving it

We are now ready to solve it!

OPIM 101 Management Science

 Input objective function into excel

OPIM 101 Management Science

 Input objective function into excel

OPIM 101 Management Science

 Input constraints into excel

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 Input objective, constraints into excel

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 Settings

Linear model option will ensure Solver uses simplex method.

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 Solution from Excel

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 Answer report from Excel

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Sensitivity report from Excel

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 Things are made easier if you organize the constraints

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Beaver Creek Pottery Example Excel Spreadsheet Data Screen

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Beaver Creek Pottery Example Solver Parameter Screen (2 of 6)

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Beaver Creek Pottery Example Adding Model Constraints

Solver Settings:

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Beaver Creek Pottery Example Solution Screen

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Beaver Creek Pottery Example Answer Report

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Useful Excel Commands

B9*B4+C9*C4+D9*D4 can be shorten to

sumproduct(B9:D9, B4:D4)

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OPIM 101 Management Science