mis ch 10 terms

Objective cell

a cell that contains the formula that creates a value that you want to optimize—maximize, minimize, or set to a specific value.

Binding constraint

a constraint is binding if changing it also changes the optimal solution.

Variable cost

a cost that changes based on how many products are sold or services rendered.

Mixed cost

a cost that contains a variable component and a fixed component.

One-variable data table

a data table that can help you analyze how different values of one variable in one or more formulas will change the results of those formulas.

Two-variable data table

a data table that can help you analyze how different values of two variables in one or more formulas will change the results of those formulas.

Scroll bar

a form control that allows you to change a number in a target cell location in single-unit increments.

Nonbinding constraint

a less severe constraint that does not affect the optimum solution.

Simplex LP method

a linear model in which the variables are not raised to any powers and no transcendent functions—such as sine or cosine—are used. A linear model can be charted as straight lines.

Linear programming

a mathematical method for determining how to attain the best outcome in a given mathematical model.

GRG Nonlinear method

a method used when the worksheet model is nonlinear and smooth; it is the default method that Excel's Solver uses. A nonlinear and smooth model is one in which a graph of the equation used would not show sharp edges or breaks if you were to plot the equation on a graph.

Iteration

a process that repeatedly enters new values in the variable cell or cells to find a solution to the problem.

Inelastic

a product is inelastic—or not responsive to change—if a large change in price is accompanied by a small amount of change in demand.

Elastic

a product or service is elastic—or responsive to change—if a small change in price is accompanied by a large change in the quantity demanded.

Constraint

a rule that you establish when formulating your Solver model.

Goal Seek

a scenario tool that maximizes Excel's cell-referencing capabilities and enables you to find the input values needed to achieve a goal or objective.

Scenario tool

a tool that enables a user to calculate numerous outputs in other cells by referencing the target cell in formulas and functions.

Variable

a value stored in a cell and used in a formula or function. The value can be changed to see how the change affects other values.

Data table

a what-if analysis tool that takes sets of input values, determines possible results, and displays all the results in one table on one worksheet.

Conditional formatting

allows the specification of rules that apply formatting to cells, appointments, contacts, or tasks as determined by the rule outcome. Also, applies custom formatting to highlight or emphasize values that meet specific criteria and is called "conditional" because the formatting occurs when a particular condition is met.

Scenario

allows you to build a what-if analysis model that includes variable cells linked by one or more formulas or functions.

Scenario Manager

allows you to manage scenarios by adding, deleting, editing, and viewing scenarios and also create scenario reports.

Solver

an add-in that helps you optimize a problem by manipulating the values for several variables with rules that you determine.

Add-in

an application with specific functionality geared toward accomplishing a specific goal.

Fixed cost

an expense that never changes regardless of how much product is sold or how many services are rendered.

What-if analysis

changes values in spreadsheet cells to investigate the effects on calculated values of interest and allows you to examine the outcome of the changes to values in a worksheet.

Changing cell

the cell or cells used to identify the various data cells whose values can differ in each scenario.

Evolutionary method

the method used when a worksheet model is nonlinear and nonsmooth and uses functions—such as VLOOKUP, PMT, or IF—to calculate the values of the variable cells or constraint cells.

Scenario Summary report

the report you can create that includes subtotals and the results of the scenarios.

Scenario PivotTable report

the report you can create that includes the summary results of the scenarios in PivotTable format.

Break-even point

the sales level at which revenue equals total costs; there is neither a profit nor a loss.

Cost-volume-profit (CVP) analysis

the study of how cost and volume are related and the effect their relationship has on profit.

Solver Limits Report

this report displays the achieved optimal value and all the input variables of the model with the optimal values. Additionally, the report displays the upper and lower bounds for the optimal value.

Solver Population Report

this report displays various statistical characteristics about the given model, such as how many variables and rows it contains.

Solver Answer Report

this report lists the target cell and the changing cells with their corresponding original and final values for the problem, input variables, and constraints. In addition, the formulas, binding status, and slacks are given for each constraint.

Solver Sensitivity Report

this report provides information about how sensitive the solution is to small changes in the formula for the target cell. This report displays the shadow prices for the constraint— the amount that the objective function value changes per unit change in the constraint. This report can only be created if your Excel model does not contain integer or Boolean—the values 0 and 1—constraints.

Optimize

to obtain a solution and find the best way to do something.

Break-even analysis

used to calculate the break-even point in sales volume or dollars, estimate profit or loss at any level of sales volume, and help in setting prices.