Linear programming offers powerful andconstructive assistance in solving managerial problems. Thefundamental strategy involves setting a programming model toillustrate the problem and then exploring the model using tools suchas Excel. In fact, Excel remains the most popular spreadsheetapplication used in the business world due to its accessibility andconvenience. However, using the Excel in setting a linear programmingproblem provides several constraints, most importantly, adding theSolver add-in to the Excel. Microsoft Excel does not have the Solverfeature by default thus, one cannot set a linear design modelwithout adding the feature. Apart from the lack of Solver by default,one experience the challenge of identifying variables or items aswell as identifying the mathematical techniques utilized forassigning inadequate items and resources among achievement of demandsin an ideal manner.
Despite the above challenges, it is possible toovercome them and use Excel to its optimum utilization. Mason (2013)suggests that one can add the Solver feature easily by picking themenu selection tools and then Add-ins in Excel, which will load theessential files, then checking the Solver Add-in and clicking okay.On the other hand, the challenge of variables and mathematicaltechniques requires one to articulate a problem and the constraintand then citing in a column the terms of the objective function,constraints, and decision variables. Allocating decision items withsome random starting numbers and then using cell orientations overtlyin writing the procedures for the objective function and restraintsusing the Solver dialogue box resolve the technique challenge.
In maximization problems, shadow price (marginalutility of reducing a restraint) replicates the alteration in thevalue of a perfect optimization for any problem. Since, the shadowprice reveals the unit of objective function increase, if one unitrelaxed the constraint, it helps explain the cost a management iswilling to pay for any extra unit of a resource.
Mason, A. J. (2013). SolverStudio: A New tool forbetter optimization and simulation modelling in Excel. INFORMSTransactions on Education, 14(1), 45-52.