Reference no: EM131113624

Reply to each comment with 250 words, the two answers must be original and different APA and with references

1. According to Merriam-Webster, optimization is the process or methodology of making something as fully perfect, functional, or effective as possible; specifically: the mathematical procedures (as finding the maximum of a function involved in this) (Merriam-Webster, 2016).

Businesses use optimization to find the most cost effective method, procedure, or outcome. Other uses are to find the most achievable or desirable performance. This is usually accomplished by maximizing desired outcomes and by minimizing undesired outcomes. Many businesses use computer simulation (modeling) of business problems that is achieved by using linear programming techniques. Which leads us into the solver tool in Excel.

The basic purpose of the solver tool is to find solutions. Using constraints, solver considers all variables to reach an objective as defined by the user. Solver is also sometimes referred to as a "what if" analysis tool. Typically, solver is used to find the maximum or minimum value for a formula or scenario. This is what is referred to as the objective.

Typical inputs to the solver tool include the decision variables, the constraints, and the mathematical relationships between the objective and constraints and the decision variables. Solver will manipulate these inputs in order to achieve the best possible outcome, the objective, as a maximum or minimum - as specified by the user.

2. Optimization in excel includes three categories which are the target cell, the changing cells and also the constraints. Optimizing is coming up with the best or most efficient way to do something and applying that to excel will create a formula to optimize something by minimizing or maximizing an objective. The target cell is the goal trying to be achieved or solution you are searching for. You will want to increase or decrease the number in the target cell.

At Wal-Mart for instance the model could be sales, customer surveys or profit and you would want to maximize each of those into the target cell. You could also use wages as a way to minimize into the target cell. A changing cell is used to optimize that target cell that you are trying to maximize or minimize. The changing cell for Wal-Mart could be the number of products sold to achieve the increasing of sales or on the opposite side see what is negatively affecting sales or profit.

Constraints could be how many items are available for sale to create the sales for an item that contributes to the whole of the store. The solver tool works by calculating the target with the changing cells and the constraints. To use this ensure you have the add in by downloading it through options. Then to use the tool you go to the data tab and click analysis and you should see the solver box. Clicking on that will bring up a dialog box to enter the target, changing cells and also constraints. You would set the target cell, which is equal to the max, min or value of (). Select the changing cells then click add to enter in the constraints then click solve and the answer will appear in the box you selected.