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Instructions - Linear Programming
Steps In Using Excel’s Linear Programming
Capabilities
1) Under "Tools" select "Solver". (If "Solver"
is not available under "Tools" see instructions for adding Linear Programming.)
2) Solver Parameters Dialog Box:
a) Step 1: Select the Target cell and enter
the cell address in the "Set Target Cell" window. The Target is the outcome
of the model that you are try to either maximize, minimize or set equal
to a certain value. For example, when trying to find the mix of patient
types that generate the greatest net income, the target cell is the cell
in the spreadsheet where net income is calculated.
b) Step 2: Select the type of model (objective
function) you are trying to solve; maximize, minimize or equal to.
c) Step 3: Identify the cells that the computer
can change in order to solve the problem (often called variables). Enter
the cell addresses of those cells that can change in the "By Changing Cells"
window. For example, when trying to find the mix of patients across DRGs
that yields the highest net income, the cells that change (variables) are
the cells that identify the number or proportion of patients in each of
the different DRGs.
d) Step 4: Including Constraints:
(1) Click on the "Add" button
(2) Enter the cell address of the cell that
you want to constrain. For example, when trying to find the best mix of
patients across DRGs, there may be a minimum number or proportion of patients
that must be served in a particular DRG. (DRG 152 must be greater than
or equal to 10% of all patients served.)
(3) Select the constraint function; <=,
>=, =, int (integer), or bin (binary).
(4) Enter the constraint value or cell reference
into the "Constraint" window. In the above example (DRG 152 >= 10%), the
value can be entered directly as .10 or a cell address with that value
can be entered.g
3) Scenario Values Dialog Box:
a) Step 1: Each of the cells identified above
as cells that will change will have a dialog window next to the cell address.
Enter the new value for each cell. When values are entered for all changing
cells, click "OK".
4) You should now be back at the "Scenario Manager"
dialog box. Click on "Show" and the values in the spreadsheet will be re-calculated
according to the parameters of the scenario.
5) When you have created multiple scenarios
it is often useful to create a summary table of all of the scenarios. To
create a summary table do the following:
a) Step 1: Click "Summary" from the "Scenario
Manager" dialog box.
b) Step 2: Select the type of report you want.
For most users, the "scenario summary" will be easier to use.
c) Step 3: Identify the results cell. This
is the cell that has the ultimate value of interest within your spreadsheet.
For example, this cell might be net income.
d) Step 4: Click "OK"
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Last Updated 4/2/00
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