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Through sensitivity analysis Fr. Efia can direct his efforts toward those changes that
make the greatest difference in revenue.
7.4.6 Summary of OLPS Modeling Effort
Before we proceed, let us step back for a moment and consider what we have done
thus far and what is yet to be done in our study of modeling:
Model categorization —we began by defining and characterizing models as deter-
ministic or probabilistic. By understanding the type of model circumstances we
are facing we can determine the best approach for modeling and analysis.
Problem/Model definition —we introduced a number of paper modeling tech-
niques that allow us to refine our understanding of the problem or problem design.
Among these were process flow diagrams that describe the logical steps that
are contained in a process, Influence Diagrams (IFD) that depict the influence
of and linkage between model elements, and even simple interview methods to
probe the understanding of issues and problems related to problem definition and
design.
Model building —the model building phase has not been described yet, but it
includes the activities that transform the paper models, diagrams, and results of
the interview process into Excel based functions and relationships.
Sensitivity analysis —this provides the opportunity to ask what-if questions of
the model. These questions translate into input parameter changes in the model
and the resulting changes in outputs. They also allow us to focus on parameter
changes that have a significant effect on model output.
Implementation of model —once we have studied the model carefully we can
make decisions related to execution and implementation. We may decide to make
changes to the problem or the model that fit with our changing expectations and
goals. As the modeling process advances we may gain insights into new questions
and concerns, heretofore not considered.
7.5 Model Building with Excel
In this section we will finally convert the efforts of Voitech and Fr. Efia into an Excel
based model. Excel will serve as the programming platform for model implemen-
tation. All of their work, thus far, has been aimed at conceptualizing the problem
design and understanding the relationships between problem elements. Now it is
time to begin translating the model into an Excel workbook. Exhibit 7.6 is the model
we will use to guide our modeling efforts. The structure of the IFD in Exhibit 7.6
lends itself quite nicely to an Excel based model. We will build the model with sev-
eral requirements in mind. Clearly, it should permit Fr. Efia flexibility in revenue
analysis; to be more precise, one that permits sensitivity analysis. Additionally, we
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