Month

<- Sales ('000s) ->

Last Year

This Year

7.0
5.5
4.5
6.0
2.2
5.0
8.5
7.0
6.1
6.7
4.6
5.1

7.2
6.1
5.1
5.7
7.1
5.6
6.2
6.6
7.7
8.2
8.4
8.8

January
February
March
April
May
June
July
August
September
October
November
December

Using ChartWizard to obtain graphical output

[1] Highlight the range B5:D16.

[2] Click the ChartWizard button (with coloured
columns) on the standard toolbar.
[3] Click chart type 'Line' and choose sub-type at
top of column 1. Then click on 'Next' button.
[4] Click 'Series' tab and enter 'Last Year' in the name
box for Series 1 and 'This Year' for Series 2.
[5] Click 'Titles' tab and enter y-axis description; next
click 'Legend' tab and choose placement 'bottom';
click 'Gridlines' tab and clear 'Major gridlines' box.
[6] Click 'Finish' button. Re-position and re-size chart.

8.0
7.0
6.0
5.0
4.0
3.0
2.0

Figure 5.1 Graphical presentation of sales data.

(Note that this model has been modified)

Input data cells are shaded

9.0

Sales ('000s)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

A
B
C
D
E
F
Example 6.1 - The Little Manufacturing Company

Last Year

L
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

Figure 5.1 Graphical presentation of sales data.

(Note that this model has been modified)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

A
B
C
D
E
F
G
H
I
J
K
Example 6.2 - Finding the Mean, Variance, and Standard Deviation of Sales Data
Sales ('000s), Si
Probability, Pi

5
0.1

10
0.3

15
0.3

Expected value, E, or Mean =

(Si - E)2 =

100

25

25
0.1

30
0.05

25

100

225

15
0

Variance =
Standard deviation =

Cell
F6
D8
F10
F11

20
0.15

Formula
SUMPRODUCT(D3:I3, D4:I4)
(D3 - $F6)^2
SUMPRODUCT(D4:I4, D8:I8)
SQRT(F10)

42.5
6.52

Copied to
E8:I8

Figure 5.2

User input cells

are shaded

Figure 5.3

A
B
C
D
E
F
G
Case Study 6.1 - Using a Scattergraph to Check Out Kleenup's Sales Data
No. of
Last quarter's
Sales
stores
sales
Area
visited
('000s)
1
39
15
2
44
9
3
50
10
4
64
12
5
65
3
6
55
13
7
66
15
8
12
2
9
92
20
10
81
17
Correlation Coefficient for Columns D & E is

Population
of sales area
('000s)
110
65
90
100
160
130
105
20
240
95
0.68

User input cells

are shaded

Cell F16 contains the formula CORREL(D6:D15,E6:E15)

Sales ('000s)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44

Scattergraph
20

Positive
Outlier (Area 1)
15

10

Negative
Outlier (Area 5)

0
0

10

20

30

40

50

60

Number of outlets visited

70

80

90

100

Scattergraphs can be a very useful as a preliminary step in investigating the possible

existence of OUTLIERS. An outlier is a point which doesn't seem to conform to the
general pattern. There are two outliers - areas 1 and 5 - one being positive, i.e.
achieving very good sales figures while the other area 5 is a negative outlier, being
an underachiever. Both areas must be investigated - but for totally different reasons.
These two areas will be excluded from any further analysis.
When the data for 'outlying' areas 1 (cells D6:E6) and 5 (D10:E10) is deleted from
the above table, the correlation coefficient is then recalculated as
0.99

Figure 5.3

A
45
46
47

B
C
D
E
F
G
Note that the correlation has moved much closer to 1.0, i.e. perfect correlation.

Figure 5.3

I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44

Figure 5.3

I
45
46
47

C
D
E
10
81
17
Correlation Coefficient for Columns D & E is

F
95
0.99

Cell F16 contains the formula CORREL(D6:D15,E6:E15)

f(x) = 0.2220623501x - 0.629616307
Scattergraph
R = 0.9722446157

Sales ('000s)

15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46

20

y = 0.2221x - 0.6296

15

Regression line
equation

10

R2 = 0.9722
R2 is called the Coefficient
of Determination

0
0

10

20

30

40

50

60

Number of outlets visited

70

80

90

100

R = The Correlation Coefficient = Sqrt( 0.9722) = 0.986 which is a very good line-fit

The following steps add a trendline to the data series in cell range D6:E15 above:[1] Place the mouse-pointer on one of the points in the scatter graph and click

the right-hand button to activate the shortcut menu.

[2] Choose the 'Add Trendline' option from the menu.
[3] Click on the 'Type' tab and select the Linear option.
[4] Click on the 'Options' tab and select (i) Display equation on chart (ii) Display

R-squared value on chart.

[5] Finally, click the OK button to return to the scatter graph.

Figure 5.4

Fitting a Trendline to the KleenUp Company's sales data.

(Note that this model has been modified)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38

A
B
C
D
E
F
G
H
I
Case Study 6.2 - Forecasting Bedrock Sales with the 'Moving Averages' Function

1
2
3
4
5
6
7
8
9
10
11
12

Month
January
February
March
April
May
June
July
August
September
October
November
December

Sales
246
110
430
584
318
782
834
472
562
624

User input cells are shaded

#N/A
#N/A
262
375
444
561
645
696
623
553
593
624

The following steps will produce the

MOVING AVERAGE graph below
Choose Tools|Data Analysis... command
and then click the OK button
Choose 'Moving Average' function
Highlight cells C3:C15 as the Input Range
Click on 'Labels in First Row'
Set interval to 3, i.e. a 3-month moving average
Specify output range as D4:D15
Click on 'Chart Output' to select graphical
output and then click the OK button

1
2
3
4
5
6
7

Moving Average
900
800
700

696

645

600

623

561

500

624

593

553

444

400

375

300

3-month moving average

262

200
100
0
1

3 Actual
4

6
7
Forecast

10

11

12

Note: Excel's Moving Average tool generates the values in cell range D4:D15 above.
Notice that the first two cells contain the symbol #N/A. This is because an interval
size of 3 will only apply in month 3. An interval size of n will always produce #N/A
symbols in the first n-1 cells at the beginning of the output range.

Figure 5.5 Forecasting Bedrock's sales with a 3-month moving average.

(Note that this model has been modified)

39

Figure 5.5 Forecasting Bedrock's sales with a 3-month moving average.

(Note that this model has been modified)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38

Figure 5.5 Forecasting Bedrock's sales with a 3-month moving average.

(Note that this model has been modified)

K
39

Figure 5.5 Forecasting Bedrock's sales with a 3-month moving average.

(Note that this model has been modified)

O
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38

Figure 5.5 Forecasting Bedrock's sales with a 3-month moving average.

(Note that this model has been modified)

O
39

Figure 5.5 Forecasting Bedrock's sales with a 3-month moving average.

(Note that this model has been modified)

A
B
C
D
E
F
G
H
Case Study 6.2 - Fitting a Trendline through Bedrock's Seasonal Variations
Quarterly periods
200W - Q1
1
Q2
2
Q3
3
Q4
4
200X - Q1
5
Q2
6
Q3
7
Q4
8
200Y - Q1
9
Q2
10
Q3
11
Q4
12
200Z - Q1
13
Q2
14
Q3
15

Sales
490
370
330
610
571
482
557
861
895
753
1190
1255
786
1684
1868

User input cells

are shaded

Superimposing a linear trend on Bedrock's sales data

2000
1800
1600

Sales

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40

1400

f(x) = 89.7392857143x + 128.8857142857

R = 0.7481061555

1200
1000
800
600
400
200
0
1

Quarterly Time Periods

10

11

12

13

14

Note: Follow the instructions at the bottom of Figure 5.4 to fit a trendline

Figure 5.6 Fitting a trendline through seasonal variations

15

I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40

Figure 5.6 Fitting a trendline through seasonal variations

A
B
C
D
E
F
G
H
I
Case Study 6.2 - An 'Exponential Smoothing' Model for Bedrock's Sales Data
Time Actual
Period Sales
1
233
2
290
3
230
4
310
5
480
6
400
7
415
8
460
9
380
10
246
11
110
12
430
13
584
14
318
15
782
16
834
17
472
18
562

alpha values
= 0.1
= 0.9
#N/A
#N/A
233.00
233.00
238.70
284.30
237.83
235.43
245.05
302.54
268.54
462.25
281.69
406.23
295.02
414.12
311.52
455.41
318.37
387.54
311.13
260.15
291.02
125.02
304.91
399.50
332.82
565.55
331.34
342.76
376.41
738.08
422.17
824.41
427.15
507.24

N.B.

Damping factor = 1 - alpha

Data in columns D and E was produced

by the EXPONENTIAL SMOOTHING
function in Excel's Analysis ToolPak
To obtain data in Column D
-- Enter Input range as C5:C22
-- set Damping factor equal to 0.9 (i.e.
alpha = 0.1) and output range = D5:D22
To obtain data in Column E
-- Enter Input range as C5:C22
-- set Damping factor equal to 0.1 (i.e.
alpha = 0.9) and output range = E5:E22

The results below show that the value of

alpha = 0.9 follows the actual sales pattern,
but lags one month (time-period) behind.
The value alpha = 0.1 produces an insensitive
graph - very similar to the moving-average.

Input data cells are shaded

900
Actual Sales

800

alpha values = 0.1

700

= 0.9

600

Unit sales

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45

500
400
300
200
100
0
1

6 Time
7 Period
8
9 (months)
10 11

12

13

Figure 5.7 Exponential smoothing model for Bedrock's sales data.

(Note thta this model has been modified)

14

15

16

17

18

46

Figure 5.7 Exponential smoothing model for Bedrock's sales data.

(Note thta this model has been modified)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
.1 produces an insensitive
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42 .
13 14 15 16 17 18
43
44
45

Figure 5.7 Exponential smoothing model for Bedrock's sales data.

(Note thta this model has been modified)

J
46

Figure 5.7 Exponential smoothing model for Bedrock's sales data.

(Note thta this model has been modified)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45

A
B
C
D
E
F
G
H
Case Study 6.2 - Fred Flint Finds the Optimal Value for alpha ()!
Time Actual
Period Sales
1
233
2
290
3
230
4
310
5
480
6
400
7
415
8
460
9
380
10
246
11
110
12
430
13
584
14
318
15
782
16
834
17
472
18
562
(Ci - Di)2 =

alpha values
0.422
0.9
#N/A
#N/A
233.00 233.00
257.06 284.30
245.64 235.43
272.80 302.54
360.25 462.25
377.02 406.23
393.05 414.12
421.31 455.41
403.87 387.54
337.24 260.15
241.34 125.02
320.96 399.50
431.97 565.55
383.87 342.76
551.90 738.08
670.96 824.41
586.99 507.24

This is a nonlinear (NLP) problem because

MSE represents a nonlinear objective function

Solver parameters
Set Target Cell:
Equal to:
By Changing Cells:
Subject to Constraints:

Cell
D6
D7
E7
D23
D25
J24

D25
Min
J23
J23 <= 1
J23 >= 0

Formula
$C5
J$23*C6 + (1- J$23)*D6
E$4*E6 + (1 - E$4)*E6
SUMXMY2(C6:C22,D6:D22)
D23/COUNT(D6:D22)
1 - J23

532898

alpha = =
Damping factor =
31346.9 = Objective: Minimize MSE values

Copied to
E6
D8:D22
E8:E22

0.422
0.578

900
Actual Sales

800

alpha values
0.422

700

0.9
600
500
400
300
200
100
0
1

10

Figure 5.8

11

12

13

14

15

16

17

18

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

A
B
C
D
E
F
G
H
Example 6.3 Gizmo's Production Forecasts Using the GROWTH Function
Month
1
2
3
4
5
6
7
8
9

Sales
200
360
558
925
1430
2100
3577
5715
9131

Cell
C10
G10

Formula
GROWTH(C$4:C$9,B$4:B$9,B10)
134.59*EXP(0.4686*B10)

Copied to
C11:C12
G11:G12

User input cells are shaded

Using
GROWTH
function

Using the graph's

exponential
equation =

3578
5716
9133

2500

f(x) = 134.5928004336 exp( 0.468579661 x )

R = 0.996098176

2000
1500
1000
500
0
0

J
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

A
B
C
D
E
F
G
H
Example 6.4 A Model for the Holt-Winter's Exponential Smoothing Method

User input cells are shaded

=
=
=

0.05
1.00
1.00

Year/
Period
Quarter
200W - Q1
-3
Q2
-2
Q3
-1
Q4
0
200X - Q1
1
Q2
2
Q3
3
Q4
4
200Y - Q1
5
Q2
6
Q3
7
Q4
8
200Z - Q1
9
Q2
10
Q3
11
Q4
12

Sales
Yt
490
370
330
610
571
482
557
861
895
753
1190
1255
786
1684
1868
1589

Seasonality
St
1.089
0.822
0.733
1.356
1.157
0.893
0.936
1.326
1.265
0.978
1.392
1.335
0.783
1.527
1.546
1.215

Trend
Level
Forecast
Tt
Lt
Ft+n
Values within this dashed
rectangle are initial estimates
------41.9
450.0
--43.6
493.6
535.7
46.2
539.8
441.7
55.2
595.0
429.7
54.4
649.5
881.4
58.1
707.5
814.2
62.1
769.6
683.6
85.0
854.7
778.6
85.4
940.0
1245.7
64.3
1004.4
1297.1
98.3
1102.7
1045.6
105.6
1208.3
1672.2
99.2
1307.5
1754.2

Objective: Minimize MSE values =

Sales ($'000s)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46

77882.7

2000
1800
1600
1400
1200
1000
800
600

Actual Sales
Holt-Winters

400
200
0
1

Quarterly Time periods

Figure 5.10

10

11

12

J
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46

Figure 5.10

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29

A
B
C
D
E
F
G
Example 6.5 - A Salesforce Sizing Model for Bob's Builders Providers
Month

Minimum
staff
January
30
February
20
March
40
April
90
May
110
June
120
July
120
August
100

Actual
staff
50
45
71
124
112
121
120
108

Objective: Minimize no. of new trainees =

Solver Parameters
Set Target Cell:
Equal to:
By Changing Cells:
Subject to Constraints:

Cell
D6
F14

F14
Min
F9:F12
D5:D12 >= C5:C12
F9:F12 = int(eger)
F9:F12 >= 0

Formula
ROUNDUP(0.9*D5,0) + F6
SUM(F9:F12)

Trainees
available
0
30
60
0
20
11
0

User input cells

are shaded

=x1
=x2
=x3
=x4

31

= Minimum staff requirements

= Answers must be integer
= Answers must be positive
Copied to
D7:D12

This is an NLP model so switch off the "Assume Linear Model" in the Options box

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

A
B
C
D
E
F
G
H
Example 6.6 - A Salesforce Allocation Model with NLP Constraints - Step 1
Area
A
B
C

Area sales
('000s)
6.52
10.99
15.80

Optimum
no. of days
=TA
25
=TB
37
=TC
50
112

Objective: Maximise regional sales ('000s) =

Solver Parameters
Set Target Cell:
Equal to:
By Changing Cells:
Subject to Constraints:

Cell
D5
D6
D7
F8
F10

F10
Max
F5:F7
F5:F7 = int(eger)
F5:F7 >= 0
F8 <= 112

Formula
2*LN(F5 + 1)
3*LN(F6 + 2)
4*LN(F7 + 2)
SUM(F5:F7)
SUM(D5:D7)

33.31

= Answers must be integer

= Answers must be positive
= Total no. of workforce days <= 112

Copied to

Note: This is a non-linear (NLP) model so switch off the "Assume Linear Model" parameter

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Example 6.6 - A Salesforce Model with Cost Constraints - Step 2
Staff
grade
G1
G2
G3

Pay rate
per day
125.00
109.38
93.75

Area Area sales

('000s)
A
6.36
B
10.30
C
15.57
Totals =
Budgetary constraints (i.e. new salary costs) =

Area
Costs
2,406.25
3,421.88
5,156.25
10,984
11,025

Objective: Maximise regional sales ('000s) =

Optimum
no. of days
TA =
23
TB =
29
TC =
47
99

32.23

User input cells are shaded

Solver Parameters
Set Target Cell:
Equal to:
By Changing Cells:
Subject to Constraints:

Cell
F5
F6
F7
G5
G6
G8
H12

H12
Max
J5:J7
J5:J7 = int(eger)
J5:J7 >= 0
J8 <= 112
G8 <= G9

= Answers must be integer

= Answers must be positive
= Total no. of workforce days <= 112
= New salary costs <= 11,025

Formula
Copied to
2*LN(J5 + 1)
3*LN(J6 + 2)
4*LN(J7 + 2)
IF(J5<=16, J5*C6, 16*C6 + (J5-16)*C7)
IF(J6<=16, J6*C$5,IF(J6<=32, 16*C$5 + (formula continued on next line)
(J6-16)*C$6, 16*(C$5+C$6) + (J6-32)*C$7))
G7
SUM(G5:G7)
SUM(F5:F7)

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Example 6.7 - A Media Selection Model - with GP Constraints - Step 1
Advertising budget ('000s) =

200

User input cells

are shaded

Television Magazines
(audience in '000s)
Total audience
20
7
High-income audience
2
3
Total amount
Amounts spent, x1, x2 =

120

80

200

Objective: Maximise total audience ( in '000s) =

Goal achievements
[1] Total audience
[2] Magazine budget
[3] High-income audience

Target
3000
80
500

Actual
2960
80
480

2960

Goal not achieved

OK
Goal not achieved

Solver Parameters
Set Target Cell:
Equal to:
By Changing Cells:
Subject to Constraints:

Cell
F10
F12
E15
E16
D16
F15
E17

F12
Max
D10:E10
F10 = E3
E16 >= D16
E17 >= D17
D10:E10 >= 0

= Advertising budget constraint

= Magazine expenditure constraint
= High-income audience constraint
= Answers must be positive

Formula
SUM(D10:E10)
SUMPRODUCT(D7:E7,D10:E10)
F12
E10
0.4*E3
IF(D15<=E15,"OK","Goal not achieved")
SUMPRODUCT(D8:E8,D10:E10)

Copied to

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Example 6.7 - A Media Selection Model - with GP Constraints - Step 2
Advertising budget ('000s) =

200

User input cells

are shaded

Television Magazines
(audience in '000s)
Total audience
20
7
High-income audience
2
3
Total amount
Amounts spent, x1, x2 =

Goal achievements
Deviations, di

1 Total audience
2 Magazine budget
3 High-income audience

Proportional deviations

1 Total audience
2 Magazine budget
3 High-income audience

123.1

76.9

Under
d-i

Over
d+i

0.0
3.08
23.08

0.0
0.0
0.0

d-i/ti

d+i/ti

0.00%
3.85%
4.62%

0.00%
0.00%
0.00%

200

Target
3000
80
500

Objective: Minimise the sum of the proportional deviations =

Solver Parameters
Set Target Cell:
Equal to:
By Changing Cells:
Subject to Constraints:

Cell
F10
H15
H16
H17
D21
H25

H25
Min
D10:E10, D15:E17
H15 >= G15
H16 >= G16
H17 >= G17
F10 = E3
D10:E10,D15:E17 >= 0
D15 = 0.0

Actual
3000
80
500

8.46%

= Goal 1: Total audience at least 3m

= Goal 2: Magazine expenditure
= Goal 3: high-income audience
= Advertising budget LP constraint
= Answers must be positive
= Goal 1 must not be underachieved

Formula
Copied to
SUM(D10:E10)
SUMPRODUCT(D7:E7,D10:E10) + D15 - E15
E10 +D16 - E16
SUMPRODUCT(D8:E8,D10:E10) + D17 - E17
D15/$G15
D21:E23
SUM(D21:E23)

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Example 6.8 - A Product Pricing Model for Bill's Barbecues

Maximum unit price =

Unit production costs =
Unit profit =
Unit prices P1, P2 =
Demands x1, x2 =

BBQ
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180
110.00
67.91

Hotplate
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220
140.00
65.22

177.91

205.22

67

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Objective: Maximise profits =

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Constraints
Used
121
834

Available
130
850

8,072

Solver Parameters
Set Target Cell:
Equal to:
By Changing Cells:
Subject to Constraints:

Cell
E7
E10
F10
H9
H10
F12

F12
Max
E8:F8
E7:F7 >= 0
E8:F8 <= E5:F5
H9:H10 <= I9:I10

Formula
E8 - E6
INT(325 - 1.45*E8)
INT(290 - 1.15*F8)
E10 + F10
6*E10 + 8*F10
E7*E10 +F7*F10

= Profits must be positive

= Maximum unit prices
= Storage/Labour constraints
Copied to
F7

Remember to switch off the "Assume Linear Model" parameter in the Solver dialog box

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Example 6.9 - Simulating Marketing Conditions for a New Product
Table 1: Product selling price
<-- Limits -->
Pi
Lower Upper Price
0
0.30
0.70

Table 3:
Lower
0
0.25
0.75

0.30
0.70
1.00

22.00
24.00
27.00

Product Sales
Upper Sales
0.25 40,000
0.75 45,000
1.00 50,000

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1.00

Table 2: Variable costs

<-- Limits -->
Lower Upper
Costs
0
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18.00
0.40
0.80
20.00
0.80
1.00
22.00

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Pi
0.25
0.50
0.25
1.00

Capital
Investment = 120,000

Cost Volume
Profit ('000s)
22 45,000
-30
18 50,000
180
18 50,000
180
22 45,000
-120
20 45,000
-30
18 45,000
150
18 40,000
40
20 50,000
80
20 50,000
-20
20 45,000
-30
20 50,000
80
18 50,000
330
22 45,000
-30
18 40,000
120
20 40,000
40
18 45,000
150
22 45,000
105
20 45,000
60
20 45,000
195
20 40,000
-40
Average profit ('000s) = 70.5

Figure 5.17

Pi
0.40
0.40
0.20
1.00

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Because of the
volatility of the
RAND function,
the values in
this model may
not be the same
as those shown
in the textbook.

Figure 5.17