An Introduction to Management Science, 12e. Instructions for Using Excel 2007
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1 An Introduction to Management Science, 12e Instructions for Using Excel 2007 Appendix 12.2 Simulation Using Crystal Ball Pages 591 2: Defining and Entering Assumptions We are now ready to define the probability distributions corresponding to each of the assumption cells. We begin by defining the probability distribution for the direct labor cost. Step 1. Select cell C21. Step 3. When the Distribution Gallery: Cell 21 dialog box appears: Choose Custom* Step 4. When the Define Assumption: Cell C21 dialog box appears: If the Load Data button appears in the dialog box, proceed to Step 5. Otherwise, click the double-arrow button to the right of the Name box. The Load Data button should then appear in the dialog box; proceed to Step 5. Step 5. Choose Load Data Enter B9:C13 in the Location of data box Click Keep Linked to Spreadsheet to terminate the data entry process The procedure for defining the probability distribution for the parts cost is similar. Step 1. Select cell C22 Step 3. When the Distribution Gallery: Cell C22 dialog box appears: Choose Uniform (Use the scroll bar to see all possible distributions.) Step 4. When the Define Assumption: Cell C22 dialog box appears: Enter =E8 in the Minimum box Enter =E9 in the Maximum box Click Enter
2 Finally, we perform the following steps to define the probability distribution for first-year demand. Step 1. Select cell C23 Step 3. When the Distribution Gallery: CellC23 dialog box appears: Choose Normal Step 4. When the Define Assumption: Cell C23 dialog box appears: Enter =E12 in the Mean box Enter =E13 in the Std. Dev. box Click Enter Page 592: Defining Forecasts After defining the assumption cells, we are ready to define the forecast cells. The following steps show this process for cell C27, which is the profit forecast cell for the PortaCom project. Step 1. Select cell C27 Step 2. Choose Define Forecast Step 3. When the Define Forecast: Cell C27 dialog box appears: Profit will appear in the Name box Pages 592 3: Setting Run Preferences We must now make the choices that determine how Crystal Ball runs the simulation. For the PortaCom simulation, we only need to specify the number of trials. Step 1. Choose Run Preferences Step 2. When the Run Preferences dialog box appears: Make sure the Trials tab has been selected Enter 1000 in the Number of trials to run: box
3 Page 593: Running the Simulation Crystal Ball repeats three steps on each of the 1000 trials of the PortaCom simulation. 1. Values are generated for the three assumption cells according to the defined probability distributions. 2. A new simulated profit (forecast cell) is computed based on the new values in the three assumption cells. 3. The new simulated profit is recorded. To begin the simulation, choose Start. There are no changes to the remaining copy on pages Appendix 15.2 Using CB Predictor for Forecasting Page 745: Moving Averages section, Revised Steps Step 1. Click the Crystal Ball tab on the Ribbon Step 2. In the Run Group, click Tools Step 3. When the list of Professional Tools appears, click CB Predictor Step 4. When the Input Data tab of the CB Predictor dialog box appears: Enter B1:B13 in the Range box Select First row has headers Select Data in columns Step 5. When the Data Attributes tab of the CB Predictor dialog box appears: Select weeks from the Data is in list Select with no seasonality (all seasonal methods skipped) Step 6. When the Method Gallery tab of the CB Predictor dialog box appears: Select Single Moving Average Double-click over the Single Moving Average method area Step 7. When the Single Moving Average dialog box appears:
4 Select User defined Enter 3 in the Periods box Step 8. When the Method Gallery tab of the CB Predictor dialog box appears: Step 9. When the Results tab of the CB Predictor dialog box appears: Enter 1 in the Enter the number of periods to forecast box Enter B14 in the Paste forecasts at cell box Click Report Click Charts Click Results Table Click Methods Table Click Run No other changes to this section. Page 746: Exponential Smoothing section, Revised Steps Step 1. Click the Crystal Ball tab on the Ribbon Step 2. In the Run Group, click Tools Step 3. When the list of Professional Tools appears, click CB Predictor Step 4. When the Input Data tab of the CB Predictor dialog box appears: Enter B1:B13 in the Range box Select First row has headers Select Data in columns Step 5. When the Data Attributes tab of the CB Predictor dialog box appears: Select weeks from the Data is in list Select with no seasonality (all seasonal methods skipped) Step 6. When the Method Gallery tab of the CB Predictor dialog box appears: Select Single Exp. Smoothing Double-click over the Single Exp. Smoothing method area
5 Step 7. When the Single Exp. Smoothing dialog box appears: Select User defined Enter.2 in the Alpha box Step 8. When the Method Gallery tab of the CB Predictor dialog box appears: Step 9. When the Results tab of the CB Predictor dialog box appears: Enter 1 in the Enter the number of periods to forecast box Enter B14 in the Paste forecasts at cell box Click Report Click Charts Click Results Table Click Methods Table Click Run No other changes to this section.
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