Decision Modeling & Risk Analysis

Decision Modeling & Risk Analysis

Please apply the following methodology to the Excel Setup Template for our Week 4 Assignment.

The Excel function:    =RAND()   in column J randomly generates a number between 0 and 1. This is used as a cumulative probability to generate the triangular random numbers in column K. Since random values generated by =RAND() will refresh and change whenever a new task is done in the spreadsheet, you may freeze column J so that they will not change.  Once columns K is created, its values should be copied into cell C2 (annual demand) – one at a time. Then Excel’s Solver is used to solve for q (cell C8 – the decision variable ). The Solver solution will also populate the other cells below C8. Cell C16 is the  objective function  to be minimized. After obtaining a Solver solution at each step and for each demand value, the obtained Solver solutions are copied into columns L, M, and N (result in cell C16 is copied to column L, result in C9 goes to column M, and result in C10is copied to column N). To see the Solver set-up, click into the Data menu of Excel, and click into the Solver add-in on the right of the ribbon at the top.

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