Chapter 1

Introduction to Spreadsheet Models for Optimization

This is a book about optimization with an emphasis on building models and using spreadsheets. Each facet of this theme—models, spreadsheets, and optimization— has a role in defining the emphasis of our coverage.

A model is a simplified representation of a situation or problem. Models attempt to capture the essential features of a complicated situation so that it can be studied and understood more completely. In the worlds of business, engineering, and science, models aim to improve our understanding of practical situations. Models can be built with tangible materials, or words, or mathematical symbols and expressions. A mathematical model is a model that is constructed—and also analyzed—using mathematics. In this book, we focus on mathematical models. Moreover, we work with decision models, or models that contain representations of decisions. The term also refers to models that support decision-making activities.