Operations and Supply Chain Management The Core

492 appendix A LINEAR PROGRAMMING USING THE EXCEL SOLVER
Step 2: Calculate Total Profit This is E4 (this is equal to B3 times the $300 revenue associated
with each end table, plus C3 times the $500 revenue for each sofa, plus D3 times the $200
revenue associated with each chair). Note the $75,000 fixed expense that has been subtracted from
revenue to calculate profit.
Step 3: Set Up Resource Usage In cells E6 through E15, the usage of each resource is
calculated by multiplying B3, C3, and D3 by the amount needed for each item and summing the
product (e.g., E6 = B3*B6 + C3*C6 + D3*D6). The limits on these constraints are entered in
cells G6 to G15.
Step 4: Set Up Solver Go to Tools and select the Solver option.
a. Set Objective: is set to the location where the value we want to optimize is calculated.
This is the profit calculated in E4 in this spreadsheet.
b. To: is set to Max since the goal is to maximize profit.
c. By Changing Variable Cells: are the cells that Solver can change to maximize profit (cells
B3 through D3 in this problem).
d. Subject to the Constraints: is where a constraint set is added; we indicate that the range
E6 to E15 must be less than or equal to G6 to G15.