Complete solution manual spreadsheet modeling and decision analysis a practical
introduction to business analytics 9th edition questions & answers with rationales
(chapter 1-15)
, Spreadsheet modeling and decision analysis a practical introduction
to business analytics 8th edition solution manual
Chapter 1: introduction to modeling & problem solving
1. Decision analysis - identifying and evaluating the different possible courses of action that might be chosen to address
a decision problem.
2. Computer model - a set of mathematical relationships and logical assumptions implemented in a computer as a
representation of some real-world object or phenomenon.
3. A spreadsheet model is a type (or special case) of a computer model where a spreadsheet is used to implement the
model.
4. Business analytics - a field of study that uses computers, statistics and mathematics to solve business problems.
5. Many of the tools and techniques from the field of business analytics can be implemented and used in spreadsheets.
6. Spreadsheets are sometimes used to store lists of data; such as the grades of students in a class, or names addresses
and phone numbers of friends and family. These types of "data base" applications of spreadsheets do not fall into the area of
business analytics unless they data is being “mined” with a specific objective in mind.
7. Spreadsheets facilitate the decision-making process by making it easier to play out various what-if scenarios.
8. A modeling approach to decision making is beneficial in that the decision maker can analyze the probable impact of
numerous alternative before selecting an alternative for implementation.
9. Dependent variable - a bottom-line performance measure of interest to the decision maker that is influenced by other
variables in the model; denoted by the symbol y in the expression y= (x1, x2, ... X3).
10. Independent variable - a variable that influences (or plays a role in determining) the value of some bottom-line
performance measure (dependent variable); denoted by the symbols xi in the expression y= (x1, x2, ... X3).
11. Yes, a model can have more than one dependent variable. In some decision problems a manager might be interested
in evaluating various alternatives on the basis of profit, probable number of injuries, resulting amount of toxic waste produced,
etc. Each of the variables represents a bottom-line performance measure that the manager might be interested in that should
be included in the model.
12. Yes. See the answer to the previous question.
, 13. The solution to prescriptive models tell managers what actions to take while descriptive models simply describe the
operation of a system. In descriptive models, the values to be assumed by one or more independent variables are uncertain and
not under the decision maker's control.
14. The solution to prescriptive models tell managers what actions to take while predictive models provide forecasts of
what will happen in the future. In predictive models, the functional form () describing the nature of the relationship between
the dependent and independent variable is ill-defined or not precisely known.
15. Descriptive models have a well-defined functional form, but the values of one or more of the independent Variables
are unknown or uncertain. In predictive models, the values of the independent variables are Known or under the decision
maker's control, but the functional form () describing the nature of the relationship between the dependent and independent
variables is ill-defined or not precisely known.
16. Description - to report on or summarize the features, characteristics or behavior of some object or
phenomenon.Prediction - an estimate or forecast of what will occur in the future. Prescription - directions, orders, or advise on
how to solve a problem.
17. Consider the problem of determining how to travel from your home to school or work. There are probably many
different routes that could be taken that might influence the total distance (or total length of time) required for the trip. Most
people would be interested in determining the route that requires the least distance (or least amount of time). In this sort of
problem (also known as a shortest path problem) the different routes that can be chosen represent independent variables and
the dependent variable would be the total distance (or total travel time).
18. The spreadsheet in figure 1.2 most closely resembles a prescriptive model because the function form relating the
dependent and independent variables is well-defined and the values of the independent variables are known, or are under the
decision maker's control.
19. “probortunity” is the combination of the words problem and opportunity and denotes the fact that every problem can
also be viewed as an opportunity.
20. The steps in the problem solving process are:
1) identify the problem
2) formulate and implement a model
3) analyze the model
4) test the result of the model
5) implement the solution
, 21. All of the steps are important but identifying the correct problem is probably the most important. If we fail to identify
the correct problem, all the effort expended in solving the problem will be wasted.
22. No. A model must accurately represent only the relevant details of a decision problem.
23. The simplest model that provides accurate solutions is usually the best choice.
24. Advertisers commonly manipulate decision making to increase consumer's expectations regarding price. For instance,
a national fast food chain recently undertook an ad campaign describing a "$6.00 hamburger" that could be purchased in their
restaurants for "only" $2.95.
The most common anchor is the status quo. Individuals and committees tend to rely on the last or current values of costs
or time-to-complete projects to decide on the allocations of resources to those projects.
These estimates are usually unrealistically optimistic.
25. Sales people often frame the cost of purchasing an item so that it appears it is "…just pennies a day!"
The the legal realm, defense attorneys tend to frame jury awards as a gain: "how much should the defendant have to pay
to make the plaintiff whole again?" whereas plantiff's attorney's favor a loss frame: "how much would you have to be paid to
suffer an injury like the harm done to my client?"
One tends to get different answers from the same person on the issue of abortion by framing the problem in the following
ways: "are you in favor of killing innocent unborn children?" vs. "should a woman be able to decide what happens to her own
body?"
26. Here, both people venturing into the ocean probably made bad decisions. This example should underscore the point
that the outcome does not determine the quality (goodness or badness) of the decision.
27. It might be worth noting that students are more likely to identify good decisions that resulted in bad outcomes rather
than bad decisions that resulted in good outcomes because bad outcomes tend to make the headlines.
case 1-1: patrick’s paradox
• jimmy carter's decision to attempt to rescue the american hostages held in iran in the early 1980s, arguably, could
have been a good decision that resulted in a bad outcome.
• the movie forest gump is replete with examples of bad (seemingly illogical) decisions that results in good outcomes.
• airline pilots have undoubtedly made bad decisions to take-off or land in unsafe weather conditions without suffering
a bad outcome.
introduction to business analytics 9th edition questions & answers with rationales
(chapter 1-15)
, Spreadsheet modeling and decision analysis a practical introduction
to business analytics 8th edition solution manual
Chapter 1: introduction to modeling & problem solving
1. Decision analysis - identifying and evaluating the different possible courses of action that might be chosen to address
a decision problem.
2. Computer model - a set of mathematical relationships and logical assumptions implemented in a computer as a
representation of some real-world object or phenomenon.
3. A spreadsheet model is a type (or special case) of a computer model where a spreadsheet is used to implement the
model.
4. Business analytics - a field of study that uses computers, statistics and mathematics to solve business problems.
5. Many of the tools and techniques from the field of business analytics can be implemented and used in spreadsheets.
6. Spreadsheets are sometimes used to store lists of data; such as the grades of students in a class, or names addresses
and phone numbers of friends and family. These types of "data base" applications of spreadsheets do not fall into the area of
business analytics unless they data is being “mined” with a specific objective in mind.
7. Spreadsheets facilitate the decision-making process by making it easier to play out various what-if scenarios.
8. A modeling approach to decision making is beneficial in that the decision maker can analyze the probable impact of
numerous alternative before selecting an alternative for implementation.
9. Dependent variable - a bottom-line performance measure of interest to the decision maker that is influenced by other
variables in the model; denoted by the symbol y in the expression y= (x1, x2, ... X3).
10. Independent variable - a variable that influences (or plays a role in determining) the value of some bottom-line
performance measure (dependent variable); denoted by the symbols xi in the expression y= (x1, x2, ... X3).
11. Yes, a model can have more than one dependent variable. In some decision problems a manager might be interested
in evaluating various alternatives on the basis of profit, probable number of injuries, resulting amount of toxic waste produced,
etc. Each of the variables represents a bottom-line performance measure that the manager might be interested in that should
be included in the model.
12. Yes. See the answer to the previous question.
, 13. The solution to prescriptive models tell managers what actions to take while descriptive models simply describe the
operation of a system. In descriptive models, the values to be assumed by one or more independent variables are uncertain and
not under the decision maker's control.
14. The solution to prescriptive models tell managers what actions to take while predictive models provide forecasts of
what will happen in the future. In predictive models, the functional form () describing the nature of the relationship between
the dependent and independent variable is ill-defined or not precisely known.
15. Descriptive models have a well-defined functional form, but the values of one or more of the independent Variables
are unknown or uncertain. In predictive models, the values of the independent variables are Known or under the decision
maker's control, but the functional form () describing the nature of the relationship between the dependent and independent
variables is ill-defined or not precisely known.
16. Description - to report on or summarize the features, characteristics or behavior of some object or
phenomenon.Prediction - an estimate or forecast of what will occur in the future. Prescription - directions, orders, or advise on
how to solve a problem.
17. Consider the problem of determining how to travel from your home to school or work. There are probably many
different routes that could be taken that might influence the total distance (or total length of time) required for the trip. Most
people would be interested in determining the route that requires the least distance (or least amount of time). In this sort of
problem (also known as a shortest path problem) the different routes that can be chosen represent independent variables and
the dependent variable would be the total distance (or total travel time).
18. The spreadsheet in figure 1.2 most closely resembles a prescriptive model because the function form relating the
dependent and independent variables is well-defined and the values of the independent variables are known, or are under the
decision maker's control.
19. “probortunity” is the combination of the words problem and opportunity and denotes the fact that every problem can
also be viewed as an opportunity.
20. The steps in the problem solving process are:
1) identify the problem
2) formulate and implement a model
3) analyze the model
4) test the result of the model
5) implement the solution
, 21. All of the steps are important but identifying the correct problem is probably the most important. If we fail to identify
the correct problem, all the effort expended in solving the problem will be wasted.
22. No. A model must accurately represent only the relevant details of a decision problem.
23. The simplest model that provides accurate solutions is usually the best choice.
24. Advertisers commonly manipulate decision making to increase consumer's expectations regarding price. For instance,
a national fast food chain recently undertook an ad campaign describing a "$6.00 hamburger" that could be purchased in their
restaurants for "only" $2.95.
The most common anchor is the status quo. Individuals and committees tend to rely on the last or current values of costs
or time-to-complete projects to decide on the allocations of resources to those projects.
These estimates are usually unrealistically optimistic.
25. Sales people often frame the cost of purchasing an item so that it appears it is "…just pennies a day!"
The the legal realm, defense attorneys tend to frame jury awards as a gain: "how much should the defendant have to pay
to make the plaintiff whole again?" whereas plantiff's attorney's favor a loss frame: "how much would you have to be paid to
suffer an injury like the harm done to my client?"
One tends to get different answers from the same person on the issue of abortion by framing the problem in the following
ways: "are you in favor of killing innocent unborn children?" vs. "should a woman be able to decide what happens to her own
body?"
26. Here, both people venturing into the ocean probably made bad decisions. This example should underscore the point
that the outcome does not determine the quality (goodness or badness) of the decision.
27. It might be worth noting that students are more likely to identify good decisions that resulted in bad outcomes rather
than bad decisions that resulted in good outcomes because bad outcomes tend to make the headlines.
case 1-1: patrick’s paradox
• jimmy carter's decision to attempt to rescue the american hostages held in iran in the early 1980s, arguably, could
have been a good decision that resulted in a bad outcome.
• the movie forest gump is replete with examples of bad (seemingly illogical) decisions that results in good outcomes.
• airline pilots have undoubtedly made bad decisions to take-off or land in unsafe weather conditions without suffering
a bad outcome.
