Microsoft Office Tutorials and References
In Depth Information
Exhibit 1.8
Improved workbook—data collection area
information can be gleaned from the risk profile or the frequency distribution that
underlies the risk profile. Clearly the information content of the risk profile is far
more revealing than Julia’s original calculation of a single profit of $1,257,300,
based on her selective use of specific parameter values. As a manager seeking as
thorough an analysis as possible, there is little doubt that I would prefer the risk
profile to the single scenario that Julia initially produced.
1.7 Summary
This example is one that is relatively sophisticated for the casual or first time user
of Excel. Do not worry if you do not understand every detail of the simulation. It is
presented here to help us focus on how a simple analysis can be extended and how
our best practices can improve the utility of a spreadsheet analysis. In later chapters
we will return to these types of models and you will see how such models can be
constructed.
It is easy to convince oneself of the lack of importance of an introductory chapter
of a textbook, especially one that in later chapters focuses on relatively complex
analytical issues. Most readers often skip an introduction or skim the material in
a casual manner, preferring instead to get the “real meat of the book.” Yet, in my
opinion this chapter may be one of the most important chapters of this topic. With
an understanding of the important issues in spreadsheet design, you can turn an
ineffective, cumbersome, and unfocused analysis into one that users will hail as an
“analytical triumph.” Remember that spreadsheets are used by a variety of individ-
uals in the organization, some at higher levels and some at lower levels. The design
effort required to create a workbook that can easily be used by others and serve
as a collaborative document by numerous colleagues is not an impossible goal to
achieve, but it does require thoughtful planning and the application of a few simple,
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