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This step requires only Excel tools, not Evolver. You must first develop the logic of the model in the usual way, using typical Excel formulas. This has already been done for you in the product mix model, and you can review the Excel formulas. This model is then a starting point for optimization with Evolver. In any Evolver model, there must be at least one adjustable cell, and there are usually several, possibly spread out over different ranges. In the present model, the adjustable cells are those in blue font in row 17. They correspond to the decisions the company must make: how many, if any, of each product to produce. Any values can be entered in these cells initially, even zeros. Evolver will eventually find the optimal values. The adjustable cells must lead, directly or indirectly through Excel formulas, to the objective cell that the company wants to optimize. In this model, the objective is the profit in cell C27. Evolver models often have constraints that restrict the allowable values of the adjustable cells. In this model, there are constraints on the availability of labor hours and cloth. There are formulas in cells C20 and C21 that indicate how much of each resource is used, and there are constants in cells E20 and E21 that indicate the available resources. The <= labels in between are not absolutely necessary, but they are a reminder that the company cant use more resources than are available.

Note the formula in cell C26. It uses Excels SUMIF function to sum over all fixed costs in row 14 that correspond to products produced at any positive level. This function jumps sharply if you change the value of any adjustable from 0 to a positive level or vice versa. This makes the model non-smooth (jump discontinuities), which makes the optimization much more difficult. However, Evolvers algorithms are able to handle non-smooth models quite well.

Take a close look at the model, especially the formulas in the ranges C20:C21 and C24:C27. Then enter different values in the adjustable cells and watch how the components of profit change. You might start to get a feel for good values of the adjustable cells, but you will probably not be able to guess the optimal product mix decisions.

Once the logic of the model is in place, you need to define the Evolver model. This means that you need to identify the objective cell, the adjustable cells, and any constraints.

Click the Model Definition button on the Evolver ribbon to bring up the following dialog box. First, choose whether you want to maximize or minimize, and select the cell to optimize. In this case, you want to maximize the profit cell, C27.

Click the Add button in the Adjustable Cell Ranges section. This brings up the following dialog box, where you can select a range of adjustable cells. When you click OK, the Model Definition dialog shows this range, and then you need to enter lower and upper bounds on the adjustable cell values. The limits 0 and 1800 work well here, because even if the company devotes all of its resources to a single product, it can never produce more than 1800 units of any product.

If you click the dropdown next to the Any label, you see the following dialog box. If you accept the Any default, this means that any values in the 0 to 1800, even decimal values, can be chosen. For this model, you should select the Integer option. Then Evolver will search only through integer values in the adjustable cells, which makes physical sense for the current model. The Discrete option could also be used. This is typically chosen to speed up the search. For example, you could choose the Discrete option with a Step Size of 5, and Evolver would try only the values 0, 5, 10, 15, and so on for the adjustable cells.

There are no other adjustable cells in this model, so you can now specify the resource availability constraint. Click the Add button in the Constraints section, and fill in the resulting dialog as follows. Note that there is an upper limit on the C20:C21 range, but there is no lower limit, so you leave the Minimum box blank.

When you click OK, the Model Definition dialog box looks as follows.

If you had other adjustable cell ranges or constraints, you would add them in the same way. Once you are finished and you click OK in this dialog box, nothing happens, at least not yet. You have only defined the optimization model. In Step 4, you will actually optimize.

Set up the Model Definition as shown in the last dialog box above. Remember to add limits (0 and 1800) to the adjustable cell range. Evolver requires limits, even if they are wide ones, on all adjustable cells. Also, remember to make the adjustable cells integers.

Evolver uses complex numerical algorithms to perform the optimization, and you can tweak the way these work by changing various settings.

Click the Settings button on the Evolver ribbon to bring up the following dialog box. It has four tabs, and you can look through them. Until you become more of an expert in Evolver, you should probably accept all of the default settings except possibly for the

one shown, which indicates when Evolver should stop. The settings shown are suggested. With these options, Evolver will stop when it has made very little progress (in maximizing profit) over the last 20,000 trials. However, you should be aware of a tradeoff here. The reason for such a large number of trials is that it gives Evolver a chance to find new solutions that are better than the best solution found so far. Otherwise, it might quit too early. On the other hand, if Evolver has already found the best solution, it will be spinning its wheels for the next 20,000 trials. Therefore, for simple models such as this one, you might want to reduce this to a smaller number, such as 5000 or even 1000, as I will do here.

Examine the Evolver settings. You can experiment with the number of trials.

Step 4: Optimize

So far, you have done most of the work. Now its time to let Evolver do the hard part, that is, it is time to let Evolver use its complex algorithms to find the values of the adjustable cells that satisfy the constraints and make profit as large as possible.

To optimize:

Click the Start button on the Evolver ribbon.

Depending on the size and complexity of the model, Evolver will spend seconds to minutes searching for the optimal solution, and you can watch its progress in Excels status bar at the bottom of the screen. This particular model requires only a few seconds. When Evolver finishes, it shows the following dialog box, and you can examine the information on the four tabs. For this model, you can simply click OK to accept Evolvers solution.

Run Evolver to find the optimal solution.

The optimal solution is shown below. It indicates that only shorts and jackets should be produced, with corresponding optimal profit $54,605.

When you look at an optimal solution generated by Evolver, you should look at several things: Which adjustable cells are zero and which are positive? In this case, shirts, pants, and skirts arent produced at all; only shorts and jackets are produced at positive levels. Which constraints are met exactly? In this case, all of the cloth is used, and almost all of the labor hours are used. This is important information. It could motivate the company to purchase more of these resources if the price is right. Is the solution plausible from a business point of view? In this case, the company might not like the idea of producing only 2 out of 5 products. But if it really wants to produce more products, its profit is going to decrease, mainly because of the fixed cost of equipment. There is an important concept here, namely, that if you impose more restrictions, such as requiring that more products be produced, the objective can only get worse; it can never get better. The company must weigh these alternatives when making a final decision.

Examine the optimal solution. You can experiment by changing the values in the blue adjustable cells. Either of two things will surely happen: (1) the profit will decrease, or (2) the resource availability constraints will be violated. In other words, you cant find a solution with a higher profit without violating at least one constraint. This is what it means for a solution to be optimal.

This completes the tutorial. However, we urge you to learn more. One way is to examine the example models packaged with Evolver. To see them, choose Example Spreadsheets from the Help dropdown list. This opens a file with a variety of models that illustrate optimization models in different contexts and various Evolver features. To see any of them, just click the corresponding link.

In addition, there is extensive documentation on all Evolver features under the Help dropdown list, there are many more resources on the Palisade web site www.palisade.com, and Palisade offers a range of training, consulting, and customization services. We hope these will help you to become one of the increasing number of people who use powerful optimization tools to make better decisions.

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