|The modern business world regularly forces managers to make decisions of great importance in complex situations and in the face of much uncertainty that involve many possible options for action. Successful decision-making, therefore, requires the ability to structure complex problems, to analyze available options in an uncertain world, and to finally make the best decision given the information available. This course teaches you frameworks for how to formulate managerial decision models that represent real-world problems in a wide range of business areas including operations, marketing, finance, and strategy. You learn how to analyze and ultimately solve such decision models and to understand the managerial interpretations of your model solution. The skills you learn in this course will greatly enhance your analytical problem solving capabilities.
This course develops and uses Excel spreadsheets as a modeling platform, because spreadsheets have become an essential medium of business analysis. You learn how to apply analytical tools including optimization, simulation, and decision trees to examine managerial decision models using Excel commands, functions, and add-ins. You practice good spreadsheet design and presentation principles, and perform comprehensive sensitivity analyses using your spreadsheet models to check the robustness of the proposed decisions. Business applications include those of resource allocation (how to utilize available resources optimally), risk analysis (how to incorporate uncertainty in problem parameters), and sequential decision-making through time. In case discussions you explore the effectiveness of various spreadsheet model designs in informing managerial decision-making.
|Previous or concurrent exposure to statistics at the level of 41000, to financial accounting at the level of 30000, and microeconomics at the level of 33001 is helpful, but not required. Although the example models discussed in this class cross many functions of business, little background in those areas is required. Some basic financial and statistical concepts such as NPV (Net Present Value), mean/variance of random variables, cash flow and income statement, etc. are used in examples and assignment problems in the class. I will briefly review these concepts when necessary, and more importantly, I will demonstrate how these concepts are used in Excel. If you are not familiar with these concepts, you must be willing to put in extra effort.
I assume that you have some familiarity with Excel 2010. However, one does not have to be an Excel expert to benefit from the course. Knowing how to enter and copy simple formulas involving relative and absolute cell addresses, how to use general-purpose Excel functions (for example, the If() function) and how to draw different types of graphs in Excel is sufficient. To insure that your Excel skills are sufficient for the class, please review the following chapters in the Powell and Baker textbook before the first day of class. I will also cover some of this material in class (especially Chapter 5) throughout the quarter.
- Chapter 3
- Chapter 4, Sections 4.1-4.6
- Chapter 5 (actually, not really review, we will cover "spreadsheet engineering" throughout the quarter)
Description and/or course criteria last updated: 06/2013