CHAPTER 3 THE CONCEPTUAL PAPER WORKSHEET

To solve the Break-Even ModelThrough a table of relevant data, finding

the answer where PROFIT is exactly zero. Through a graphical representation of the

relevant data, finding the answer from the graph.

Through a system of linear simultaneous equations, finding the answer by solving the system of linear equations.

CONCEPTUAL PAPER WORKSHEET (CPW) To highlight the important modelling and pa

ckage handling issues The construction of a CPW is useful in thre

e ways : To clarify any academic modelling issues. To determine the size of the worksheet and the

range of cells that will be used. To identifies the range of package facilities that

will need to be activated in constructing the model through a worksheet.

WHAT IS A WORKSHEET ? A large two dimensional piece of paper

COLUMNS---LETTER LABELS ROWS--- NUMBER LABELS CELL/BOX---combination of COLUMN and ROW Example Table 3.1

On WORKSHEET, the user enters instructions that enable the package to perform relevant data manipulations.

Two software packages The SPREADSHEET package EXCEL

To be controlled through MENUS The STATISTICAL package MNITAB

To be controlled through COMMANDS

User inputs of CPWA clear specification of the academic

issues (THE THEORETICAL MODEL ) Is the problem properly defined? Is the model properly structured? Are all the variables required specified? Are the variables of interest properly defined?

Explicit recognition of the package handling facilities(BUILDING A WORKSHEET )

SECTION I: CREATING A TABLE OF DATA

Four inputs into the Break-Even modelSELLING PRICE per unit (p) ,FIXED COSTS (FC) ,VARIABLE COST per unit (VC) , andRANGE of OUTPUTS

q---quantity to produceTo determine SIZE of the worksheet to be

created.

BASIC INPUTS A1—A23 (Table 3.2)

Cell A9: FORMULA : =A8+10 '=' means that this cell input is a formula and not a label

or a number COPY the IDEA CONTAINED in A9 INTO A10 and then

ALL THE WAY THROUGH TO A23.

TOTAL REVENUE COLUMN B7—TR cell B8: FORMULA : =$B$3*A8

PRICExQUANTITY $--RELATIVE and an ABSOLUTE CELL ADDRESS. X is replaced by *

COPY the idea contained in B8 into the cells B9 THROUGH TO B23

TOTAL COST COLUMN C7—TC C8: FORMULA : =$B$4+$B$5*A8

TC = FC + VCq COPY the idea contained in C8 into the cell

s C9 THROUGH TO C23

PROFITD7—PROFITD8: FORMULA : =B8-C8Copy the FORMULA in cell D8 into D9 TH

ROUGH TO D23

FILE HANDLING FACILITIES , FILE/SAVEFILE/OPEN

SUMMRYDATA ENTRY : entering both labels/names

and formulaCOPYING : to copy a formula to other FILE HANDLING : to save and retrieve the

worksheet

SECTION II: WORKSHEET GRAPHS

What kind of graph is to be constructed?pie charts, bar graphs , X-Y graph,…

What is to measured along the X-axis? Q– quantity produced

What is to be measured up the Y-axis? TR , TC and PROFIT

Labelling the Lines (TR , TC and PROFIT )

Graph TitlesBreak-Even Analysis

Scaling of Axes

SECTION III: GENERATING A

NUMERICAL SOLUTION Matrix A and Matrix b

E1—E4: TR F1—F4: TC G1—G4: q Matrix A is in the range E2 to G4

13133x30

500

0

011

1510

2001

xx

b

q

TC

TR

xA

H1—H4: RHSMatrix b is in the range H2 to H4

Where to put the answer?J1—J4: ANSWER

To generate the answer by the following steps: inform the package as to the whereabouts

of the matrix A. inform the package that we would like to

form the inverse of A , A-1.

inform the package where in the spreadsheet we would like to store the inverse matrix A-1

inform the package as to the whereabouts of the matrix b

inform the package that we would like to perform the multiplication A-1b

inform the package where we would like the answer to be displayed