Microsoft Office Tutorials and References
In Depth Information
to the weather condition which contains a black dot when activated. Later we will
discuss the operation of option buttons, but for know, it is sufficient to say that these
buttons, when grouped together, result in a unique number to be placed in a cell.
If there are 3 buttons grouped, the numbers will range from 1 to 3, each number
representing a button. This provides a method for a specific condition to be used
in calculation: Rainy
3. Only one button can
be depressed at a time and the Cloudy condition, row 21, is the current condition
selected. All this occurs in the area entitled Weather.
Once the Weather is selected, the Attendance is known, given the direct relation-
ship Fr. Efia has assumed for Weather and Attendance. Note that the number in the
Attendance cell, E21 of Exhibit 7.7, is 2500. This is the number of attendees for
a Cloudy day. As you might expect, this is accomplished with a logical IF func-
tion and is generally determined by the following logical IF conditions: IF value of
1, Cloudy
2 and Sunshine
2 then 2500, else 4500. Had we
selected the Rainy option button then the value for attendees, cell E18, will be 1500.
As stated earlier, we will see later how the buttons are created and controlled.
Next, the number of attendees is translated into an EntryFee revenue (E21 C3
1 then 1500, else IF value of button
$2500 10
$25,000) in cell G21. The various game revenues also are deter-
mined from the number of attendees. For example, OTSD revenue is the product
of the number of attendees in cell E21 (2500), the value of each bet in cell C13
($50), and the probability of an OLPS win (1–C9
0.80), which results in $100,000
(2500 $50 0.80) in cell H21. The calculations for WOB and BT are $81,250 4
and 56,250, 5 respectively.
Of course, there are also payouts to the players that win, and these are shown as
Costs on the line below revenues. Each game will have payouts, either to OLPS or
the players, which when summed equal the total amount of money that is bet. In the
case of Cloudy , each game has total bets of $125,000 ($50 2500). You can see that
if you combine the revenue and cost for each game, the sum is indeed $125,000,
the total amount bet for each game. As you would expect, the only game where the
costs (attendee’s winnings) are greater than the revenues (OLPS’s winnings) is the
BT game. This game has odds that favor the attendee. The cumulative profit for the
event is the difference between the revenue earned by OLPS in cell K21 ($262,500)
and the costs incurred in cell K22 ($137,500). In this case, the event yields a profit
of $125,000 in cell K23. This represents the combination of Entry Fee , $25,000, and
Profit from the games, $100,000. 6
The model in Exhibit 7.7 represents the basic layout for problem analysis. It
utilizes the values for entry fees, attendance, player odds, and bets that were agreed
to by Voitech and Fr. Efia. In the next section we address the issues of sensitivity
analysis that Fr. Efia has raised.
4 2500 $50 (1–0.35)
5 2500 $50 (1–0.55) = $56,250.
6 ($100,000–$25,000) + ($81,250–$43,750) + ($56,250–$68,750)
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