How to Excel in Analytical Decision Modeling

This paper outlines a course in business analytics that provides a rigorous, logical, analytical, yet intuitive and practical approach to business problem solving using Microsoft Excel. The course concept, methodology and pedagogy are illustrated through a variety of business applications. The course primarily addresses problems involving optimal resource allocation (how to best utilize given resources) and risk analysis (how to analyze decisions involving uncertainty), although some Excel tools for data analysis (how to estimate model parameters) and forecasting (how to extrapolate past observations into the future) are also covered. In each area, we consider specific problems in operations, finance and marketing, build models to set them up on Excel spreadsheets, analyze and solve them using the available Excel commands, tools and add-ins, and study their economic interpretations. In this sense, the course also integrates various functional areas of business management on a common Excel platform. This practical approach to problem solving in Excel has proved to be readily accessible to managers, who usually find spreadsheets natural, intuitive, and user friendly medium for organizing information and performing “what if’ analyses, which has made them indispensable tools of modern business analysis.