Spreadsheet Models for Managers:
A Hyperbook

Spreadsheets are wonderful tools. They help us track what is, they help us figure out what was, and they help us predict what will be. Despite the popularity of spreadsheets, despite their wide use, and despite our familiarity with them, most of us receive only a fraction of the benefit we could derive from our work with spreadsheets.

This Hyperbook — a stand-alone Web site you read with your Web browser — is packed with tips, techniques, and dozens of worked examples that show you:

• How to manage spreadsheet development projects
• How to build high-reliability and low-maintenance models of businesses and business processes using spreadsheets
• How to exploit sophisticated mathematical techniques to reduce modeling errors and maintenance problems.

The overall philosophy is that you shouldn't need a Ph.D. to create a high-value business model that lets you predict the performance of a business process. A simple spreadsheet model is probably good enough for most business purposes, given the rapid pace of change in today's markets. But when you do make a model, it should be easy to understand and maintain, and it should be right.

New and Updated for the
2007-2008 Academic Year!This hyperbook is based on a course called Spreadsheet Models for Managers, which I began developing at the Harvard Extension School in 1993, is based on a course I conceived and which I've taught there every year since then. At Harvard, and wherever I've taught the course, I've had the benefit of questions, complaints, wishes and criticism from hundreds of students.

This is a course about using spreadsheets to model businesses and business processes, from the perspective of a manager. It emphasizes both the modeling techniques, and the process of modeling itself. That is, we're not only interested in building models that managers need, but we want to build them in ways that are easily managed, and that give reliable and cost-effective results.

In the form of a stand-alone Web site, it includes dozens of worked examples and homework problems, with solutions. Not just descriptions of solutions (though we include that, too) — actual Excel workbooks. Moreover, the solutions are far more than just answers. They come complete with narrative explanations which discuss alternatives and tradeoffs of different approaches. And when more than one approach is possible and instructive, the solution includes both.

Here's a sampling of topics:

• Accumulations and derivations: running sums, running differences
• Relative and absolute references: what the heck are they good for?
• Operations on references: unions, intersections, and compound ranges
• Named parameters, parameter blocks: save time and reduce maintenance costs
• Drilling down and rolling up: tools for doing either one effectively
• Array formulas: manipulate whole ranges, not single cells
• Matrix multiplication: do in one row what others do in twenty
• Safety margins and crowding: save money by managing your resources
• Circular reference headaches: how to resolve them
• Convolution: simplify calculations involving time variation
• Use convolution for multiple lease events
• Terminology, styles, tips for effective charts
• Using charts to catch errors in models
• Key practices for organizations that use spreadsheet technology on an enterprise scale
• Formal technical reviews of spreadsheets: reduce errors and educate your team
• Writing macros using Visual Basic for Applications
• Inventory modeling: Economic Order Quantity (EOQ)
• Purchasing decisions in the context of volume discounting
• Modeling waiting lines
• The Fast Food Drive-Thru: How long should the driveway be?