Problem Solving & Spreadsheet Modeling Essay Example for Free

Problem solution Spreadsheet Modeling EssayThis paper negotiation about the hassle settlement make along with examples, as well as one of more(prenominal) comm totally used meansling and analytic techniques, i.e. spreadsheet modeling. It overly talks about its dependency, its uses, dis goods and well as explores ways to better this very new, entirely powerful technique. Modeling is the surgical transition of creating a simplied representation of real life hassles and representing them in an organized fashion in coif to understand a particular problem. These models brook manoeuver many forms such as mental, visual, mathematical or electronic spreadsheets to name a few. Their uses commode be seen in al nearly every field of our insouciant lives such as billetes, governments, human resources, science and engineering, and medicine etc. Their primary function is to gain perceptivity into a circumstantial problem and after getting a clear understanding of the to pic, one croupe easily approach it from different directions with possible solutions. This paper deales this process in detail, starting with gaining insight into a specific problem by using a problem solving model, and then moves on to how it applies to spreadsheet modeling.It also discusses different aspects of electronic spreadsheet engineering, its uses and caveats, as well as its dependency in the byplay world these daytimes. onwards creating any models, visual, mathematical or spreadsheets, one has to start with the problem solving process. The problem solving process consists of six demos that can be followed to solve almost any problem. These stages or steps be utilise and are retell multiple times, not necessarily in the same tack, to obtain an efficient and orderly solution to a particular problem. The first of these stages is exploration of a mess. A mess is a morass of unsettling symptoms, causes, data, pressures, shortfalls, and opportunities (bread maker Po well, p.18). One of the key issues in solving any problem is to be able to take any given up situation and extract key learning, problems, issues as well as opportunities from it. A problem never presentsitself in a clear, well-posed statement.It is usually hidden in a scenario, along with a dance band of other trivial information and any problem solving should start by understanding a given situation and be able to extract key information from it. During this descriptor, questions that are explored include itemization problems or opportunities that are to be faced, gaps between current and desired situations, and thinking about stated and unverbalised goals. (Baker Powell, p.21) Baker and Powell use an example of a pharmaceutic company in their book, where majority of that companys revenue is generated from the production and distri aloneion of a single drug, and present a scenario where the pa cristalt for that drug heads towards its goal date in upcoming months. Using thi s scenario, exploring the mess stage would involve the company officials to realize individual(a) researches and evaluate any threats and affects the expiration of the drug patents would cook on their revenues as well as victorious initial steps to address the upcoming problems (Baker Powell, p.21). Second stage of the problem solving process involves probing for information.This includes opinions, raw data, impressions and published literature etc. and involves casting about wide for any and all information that might shed light on what the problem really is (Baker Powell, p.22). This is basically a brainstorming class, and usually involves approaching the mess from different directions. In the case of the pharmaceutical company, for example, senior managers would handle this arrange by holding meetings and addressing their discomfort towards the upcoming problem as well as hiring outside consultants to answer company as well as industry research and gathering all the re quired facts involving this problem. This stage is usually complete when relevant information for the situation at hand if found and organized and when initial hypotheses about the source of the problem and potential solutions are discussed. (Baker Powell, p.22) The next phase of the process, known as identifying the problem, starts out in its divergent phase with a few possible problem statements that can be inferred from earlier stages. These problem statements are evaluated and results in a final, more detailed, problem statement that may or may not be an aggregation of one or more initial statements.It is imperative that distri simplyively of the initial problem statements are examined individually and eliminated carefully and the end result is an unambiguous problem statement. Forexample, the pharmaceutical executives may initially come up with two different problem statements, one dealing with someways extending patent dates and focusing on revitalizing their strategy around the existing drug, while the other classify thinking about how to come introduce other drugs into the market to cover the decline in revenues. other option looks at decreasing costs and expenses overall to cover the losses incurred.From these initial statements, developing a portfolio and introduction of new drugs come outs to win the general consensus. The next phase of searching for possible solutions to the now defined problem statement involves open-ended process searches for good, even radical, solutions. This can only be done however, when a problem statement has already been described. Considering possible solutions to an ambiguous problem is not only inefficient but also dangerous as well, since it can lead to solutions that were nowhere close to the original problem and can result in a lot of wasted time and resources.This stage is complete when a mention of potential solutions is produced and perhaps a list of advantages and disadvantages for each one (Baker Powell, p.23). In the case of the pharmaceutical example, this phase can start out with solutions including speeding up FDA approval process for the new drugs, investing RD resources and currency towards drugs with the highest percentages of approval and focusing on a new portfolio of drugs in the same medical category, and thus providing expertise in one or two specialty areas (Baker Powell, p.23). Next comes the stage of evaluating all possible solutions and decision making on the preferred solution. This is done through evaluating each of the initial solutions against a set of given criteria. This can lead directly to a preferred alternative. More often, this process leads to changes, and improvements, in the solutions themselves. Often, stronger points of multiple solutions are grafter together while less attractive aspects are removed and through this process, a final, preferred solution is slender (Baker Powell, p.24).For example, for the pharmaceutical drug scenario, after ev aluating and grafting respective(a) solutions, it can be decided that one most critical area for improvement is how RD funds are allocated over time. And finally, the problem solving process concludes with carrying into action the preferred solution. In this phase, a problem-solving group will identify sources of resistance as well as support for their solution. During this stage, once asolution has been implemented, a final evaluation is done after some time to see if the implementation has been successful or not. This stage concludes when an implementation figure is produced and executed bounteous so that the team may begin to evaluate how well it is succeeding. For example, the pharmaceutical problem solving team will have to get approval and support from the senior management for their solution and when they carry the plan forward, they must monitor its impacts and modify it as needed, and solve a new set of problems as they arise.In order for a solution to be refined, thes e six steps must sometimes be repeated multiple times, each time creating a new solution to the problems in the previous cycle. It is also outlay stating that only rarely are these six stages followed in a strict sequence. Most problem-solving processes move congest and forth from one stage to another, perhaps rethinking the problem statement while evaluating solutions, or returning to an information-gathering mode while searching for solutions (Baker Powell, p.25). Now a brief overview of the problem solving process has been outlined, we can discuss one of the more common problem solving and analyzing techniques used in the credit line world today, i.e. spreadsheet modeling. Baker and Powell explain it in their book that spreadsheet is the second best way to do many kinds of analysis and is thereof the best way to do most modeling (p.4).Basically what this means is that for any singular modeling task, there is always some better, more powerful software available that can handl e that specific task. However, due to the complexity and costs related to such applications and their very narrow scope of problem solving capabilities, it becomes inefficient for most companies and analysts to use separate software for separate models. Therefore, most of the modeling in the business world is done in electronic spreadsheets due to its nature of being able to handle and process a wide scope of modeling and analytical tasks. There are, however, limitations to electronic spreadsheets due to its broad capabilities but most modeling tasks in many companies can be easily handled through spreadsheet modeling and analytical tools. Despite their limitations, spreadsheets allow modelers to build more detailed and more complex models and also have the advantage of being pervasive in business analysis. On the other hand, however, using electronic spreadsheets is not without its downsides.The business world is still at an early stage of understanding how to develop error-freespr eadsheets. And one of the caveats of using electronic spreadsheets is assumptive that they are error free. In fact studies and research have shown that only less than ten percent of spreadsheets in individual studies have been free of any errors (Graves, p.1). These errors may be small and would seem very insignificant, such as improper sorting or entering numbers as text, but in larger companies, the results can be devastating and can cause effects ranging from ineligible candidates comme il faut police officers to a school losing more than $50,000 in funding due to budget understatements (Baker Powell, p. 6). When using electronic spreadsheets, or any software for that matter, it is also imperative to ensure that the software packages are always up to date. This can range anywhere from applying security updates to upgrading software versions altogether.Upgrading a business software is more than fairish an economic business decision. It is a matter of security, productivity, low er costs, and employee morale (Garger, p.1). The longer any software has been around, the more vulnerable it gets to malicious viruses and security breaches. Therefore any software must be updated or upgraded routinely since newer versions would be safer from a security standpoint guarding against vulnerabilities from previous versions. Another reason to keep software up to date is from a budget point of view. Usually, older versions of any software are more pricy to maintain than the newer versions (Garger, p.1). And probably the most important reason to update any software, and especially spreadsheets, is an increase in productivity. Software companies are continually adding newer features to their applications that increase productivity and are efficient in handling various tasks.More often than not, newer versions usually have larger set of capabilities and tools under their belt and can perform more tasks in lesser time and with more ease (Garger, p.2). Even though electronic spreadsheets are still quite new in the business world, their dependency has been increasing drastically in the erstwhile(prenominal) two decades. About 25 years ago, the idea of personal computers was unknown to most and modeling was performed only by specializers using demanding software on expensive hardware. This meant that only the most critical business problems could be analyzed using models, because only these problems justified the large budgets and long time commitments required to build, debug, and apply the models of the day (Graves, p.1). However, since then, the ever evolving technological advancesstarting with personal computers, spreadsheets and now the add-on features for specialized analyses have greatly changed the business world.Nowadays, anyone with a laptop and little background in spreadsheet modeling can easily handle tasks that would have been thought of as quite complex 25 years ago and would have required teams of specialist to perform (Baker Powell, p. 5). In fact, these applications have become a staple of end users and business professionals and are widely used by businesses, service agencies, volunteer groups, private sector organizations, scientists, students, educators, trainers, researchers, journalists, accountants and others (Graves, p.2) In conclusion, spreadsheets represent an ever-present broadcast for businesses and our dependency on them cannot be understated.However, as with any great tool, there are many stipulations. all tool can be only as useful and powerful as its user. Therefore, in order to use electronic spreadsheets properly, one has to be proficient in their use and must acquire the necessary skill set to create and analyze powerful and effective business models. Knowing the capabilities of any given software as well as its limitations is crucial. And finally, planning a spreadsheet model properly and never assuming that it will be error-free are necessary to create successful business models. Only with a secure foundation in spreadsheet engineering can the business analyst effectively generate real insights from spreadsheet models (Baker Powell, p.8).ReferencesBaker, Kenneth R. Powell, Stephen G. (2010-10-08). guidance Science The Art of Modeling withSpreadsheets, 3rd Edition. John Wiley Sons, Inc. Kindle Edition.Garger, John. The Advantages of Upgrading Your Business Software. Bright Hub. Nov 8th, 2010. Accessed Dec. 12th, 2012. http//www.brighthub.com/ reckon/hardware/articles/43180.aspxGraves, Sherry. The Importance Of Excel In The Workplace. SparkNET. Sept. 10, 2007. Accessed on Dec.12th, 2012. http//ezinearticles.com/?The-Importance-Of-Excel-In-The-Workplaceid=724646