Spreadsheet Models for Managers


Getting Access to Spreadsheet Models for Managers


If Spreadsheet Models for Managersyou use Excel to model businesses, business processes, or business transactions, this course will change your life. You’ll learn how to create tools for yourself that will amaze even you. Unrestricted use of this material is available in two ways.

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It resides on your computer, and you can use it anywhere. No need for Internet access.
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If you have access to the Internet whenever you want to view this material, you can purchase on-line access. Unlimited usage. I’m constantly making improvements and you’ll get them as soon as they’re available.

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Order "Spreadsheet Models for Managers, on-line edition, one month" by credit card, for USD 69.95 each, using our secure server, and receive download instructions by return email.
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Make your check payable to Chaco Canyon Consulting, for the amount indicated:
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Spreadsheet Models for Managers

Modeling waiting lines 12/9
Session Links
  • Critical assumptions for our model:
    For both arrival and service
    • Rate is constant
      There are two rates — the average arrival rate and the average service rate
    • Arrival events are independent (Poisson distribution)
      The fact that a customer has just arrived doesn’t make it any more or less likely that another one will. The fact that a customer has just been serviced doesn’t change the rate at which the next customer will be serviced.
    • The system is in equilibrium (the doors opened a long time ago)
  • Fundamental balance equation
  • If Pn= probability that there are n customers in the system, and λ is the arrival rate and μ is the service rate, then
λ Pn-1 = μ Pn

When we model waiting lines, we make several critical assumptions that make the model simpler, and they’re listed above. The most important is the assumption of equilibrium, which says that the system has been operating for a very long time, and all transients have died out. This assumption leads directly to the Fundamental Balance Equation, which expresses the idea that the probability of a new customer arriving when there are n-1 customers in the system is equal to the probability of a customer departing when there are n customers in the system. If these two probabilities are equal for all n, then the system is in balance.

Last Modified: Wednesday, 27-Apr-2016 04:15:26 EDT

The Power of Simplifying Assumptions

Modeling service systems in general is extraordinarily complex, but as we’ve seen, if we make reasonable approximations, we can gain powerful tools that are very easy to apply. In the case of service systems, we assumed that the system was at equilibrium or close to it. Analogously, we can make simplifying assumptions for many other complex questions. Examples are process control, resource scheduling, resource allocation, cost allocation, vehicle routing, and many more.