Formulas, Data Management, and Models

ADM 1370 M Applications of Information Technology for Business

Presented by: David R. Hanssen, MAcc

Student or professor materials created for this course (including presentations and posted notes, labs, case
studies, assignments, and exams) remain the intellectual property of the author(s). They are intended for
personal use and may not be reproduced or redistributed without prior written consent of the author(s).

© 2022 David R. Hanssen | ADM1370

Agenda

• Administration and Questions

• Data Models
• Data Management

© 2022 David R. Hanssen | ADM1370

Administration and Questions

Midterm Exam
• Scheduled March 2nd - 75 minutes during lecture time
(1:00PM-2:30PM EST).
• Through Zoom (Split among breakout rooms) and
Brightspace.
• There will be proctors monitoring the midterm and you
will be required to have an active webcam and
functional microphone. Any students you take the
midterm without being in the Zoom session with an
active webcam will receive a grade of 0.
• Consists of Multiple-Choice (and Short Answer) Questions,
covering lecture and textbook content up to and including
Lecture 12.

© 2022 David R. Hanssen | ADM1370

Administration and Questions
Group Compositions

• You will be allowed to form new groups of 2 for Modules 2 and 3

• New “Excel and Access” groups have been created on

Brightspace for you to join.

• You are free to continue working with your current group

member or form a new group with another student in the
course/section.

• If you want to work with your current group member, you must
still join one of the new groups so that you can submit the Excel
and Access assignments.

• You must be in a group in order to submit any course

assignments.

• You can start forming groups @ 2:30PM (after class) and must
join a group by Friday, February 18 @ 11:59PM
© 2022 David R. Hanssen | ADM1370
Administration and Questions

Excel Module Deliverables

• All Excel Workbooks and Instructions for assignment and tutorial exercises to be posted
soon.
• All tutorial and assignment exercises are to be submitted together by Sunday, March 12th

Excel Module Deliverables

• The tutorial exercises will be pre-recorded (including tutorials 1, 2, 3) and the previously
scheduled sessions will be dedicated to either theory, spreadsheet functionality, or tutorial
Q&A.

Wiki Assignment Grade and Feedback

• Teaching Assistants have started marking and your grade/feedback should be available
earliest end of week (Sunday).

© 2022 David R. Hanssen | ADM1370

Administration and Questions

Instructor Change
The instructor for sections M and N will be changing after reading week.

Section M (Online): Najib Khan Section N (In-Person): David R. Hanssen

https://www.linkedin.com/in/najib-khan-phd- https://www.linkedin.com/in/davidrhanssen/
98bb7713/

Will be visiting
Friday’s lecture
to introduce
himself.

© 2022 David R. Hanssen | ADM1370

Uses of Excel:

Summarized Uses for Spreadsheets

Creating and Monitoring Budgets Monitoring Bank Account Balance
Creating Customer Invoices Monitoring Grades
Creating Financial Statements Organizing Events
Managing Inventory Planning Cost of Trip
Managing Project/Assignment Deadlines Scheduling Employees
Measuring KPIs to monitor a New Policy Stock Market Analysis
Tracking Clients

© 2022 David R. Hanssen | ADM1370

Common Uses of Excel

Budgets:
https://templates.office.com/en-
ca/budgets

© 2022 David R. Hanssen | ADM1370

Common Uses of Excel

Project Planning:
https://support.microsoft.com/en
-us/office/present-your-data-in-a-
gantt-chart-in-excel-f8910ab4-
ceda-4521-8207-f0fb34d9e2b6

© 2022 David R. Hanssen | ADM1370

Other Uses for Spreadsheets

Michelle Asaurr, 2014

© 2022 David R. Hanssen | ADM1370

Formulas, Data Management, and Models
Structuring Problems, Analysis, and Spreadsheets

© 2022 David R. Hanssen | ADM1370

Data Modeling
Models are representations of real-world
things (people, the environment, a
business) that has been simplified to only
contains specific elements of interest (a
person’s height, temperature, revenue).
Models help us understanding parts of the
world by eliminating things that are not
important and focusing on a few specific
elements (parts) that we want to
understand.
Spreadsheets can be used to create
models that are…
Descriptive:
• Describe the capabilities of a system (flowcharts,
objects/entities)
• Describe entities and concepts (capturing data on
employees – Name, Age, Salary)
Transformative:
• Assembling data into information (financial
statements, employee reports)
• Processing data for other systems (separating or
combining employee names for data entry,
student grades)
Predictive:
• Determining outcomes based on predictions of the
future (Break-Even Analysis, Heuristic Models)
© 2022 David R. Hanssen | ADM1370
Problem Solving Framework

I have a
problem and
how do I fix it?

Questions to think:
1. What exactly is the problem?
2. Why is it a problem?
3. What can I do to fix it?

© 2022 David R. Hanssen | ADM1370

Problem Solving Framework

Problem Space: Goal State

[Where do I want to be]

The Gap
[Actions Required or
Issues to overcome]

A PROBLEM can be defined as

Initial State the difference between where
you want to be [Goal] and where
[Where am I now] you are now [Initial]

© 2022 David R. Hanssen | ADM1370

 Problem Solving Framework

How can we make Goal State

our business more (We are highly profitable)
profitable?

The Gap

Business usually have multiple

alternative courses of action that
Initial State they can consider, but which one
to choose?
(We are barely profitable)

© 2022 David R. Hanssen | ADM1370

 Problem-Solving & Modeling Process

Formulation Solution Interpretation

Identify Test Present

Perform
Problem & Develop Analyze Results & Results &
Sensitivity
Acquire Model Model Validate Implement
Analysis
Input Data Model Solution

Trial &
Error

© 2022 David R. Hanssen | ADM1370

 Problem-Solving & Modeling Process

Formulation Solution Interpretation

Identify Test Present

Perform
Problem & Develop Analyze Results & Results &
Sensitivity
Acquire Model Model Validate Implement
Analysis
Input Data Model Solution

Trial &
Error

Profitability,
Alternatives, Spreadsheet,
Financials, Formulas
Probabilities
© 2022 David R. Hanssen | ADM1370
 Problem-Solving & Modeling Process

Formulation Solution Interpretation

Identify Test Present

Perform
Problem & Develop Analyze Results & Results &
Sensitivity
Acquire Model Model Validate Implement
Analysis
Input Data Model Solution

Trial &
Error

Does my model Does my model

capture all produce
relevant reasonable
elements? results?
© 2022 David R. Hanssen | ADM1370
 Problem-Solving & Modeling Process

Formulation Solution Interpretation

Identify Test Present

Perform
Problem & Develop Analyze Results & Results &
Sensitivity
Acquire Model Model Validate Implement
Analysis
Input Data Model Solution

Trial &
Error

Test assumptions
Present findings
by preparing
and take action.
several scenarios.
© 2022 David R. Hanssen | ADM1370
Data Modeling Example: Decision Heuristics
Heuristic methods are used to speed up the
process of finding a good enough solution,
where an exhaustive search or advanced
problem-solving techniques are impractical.
• a "rule of thumb“
• an educated guess
• an intuitive judgment
• or common sense.
The most fundamental heuristic is trial and
error.
Some formal heuristics include…
Maximax method (The optimist – What is
the best option assuming the best
outcomes for all options)
Maximin method (The pessimist – What is
the best option assuming the worst
outcomes for all options)
Averaging method (What is the best option
assuming the average outcome for all
options)
Expected Monetary Value (EMV) (The
realist – What is the best option using
probabilities to determine the likely
outcome for all options)
© 2022 David R. Hanssen | ADM1370
Data Modeling Example: Decision Heuristics

Illustrated Example:
States of Nature (Demand Levels)
• The management estimates the Low Medium High
profits when choosing from the Alternatives
Demand Demand Demand
three alternatives (A, B, and C)
under the differing probable levels Decision A
of demand. 20,000 40,000 60,000
(Small Plant)
Decision B
• These profits, are presented in the 30,000 50,000 90,000
(Medium Plant)
payoff table.
Decision C
• Potential Heuristics for Alternative -120,000 25,000 200,000
(Large Plant)
Selection:
– Maximax (Optimist) Payoffs
– Maximin (Pessimist)
– Averaging (Equally Likely
Possibilities)

© 2022 David R. Hanssen | ADM1370

Data Modeling Example: Decision Heuristics

Illustrated Example: States of Nature

• Additionally, the management
Low Medium High
estimates probabilities of
different states of nature based
Demand Demand Demand
on the latest economic outlook Probabilities 0.10 0.50 0.40
reports.
Alternatives
• Heuristics based on Probability
Information: Decision A
20,000 40,000 60,000
– Expected Monetary Value (Small Plant)
(EMV)(Realist)
Decision B
30,000 50,000 90,000
(Medium Plant)
Decision C
-120,000 25,000 200,000
(Large Plant)
Payoffs

© 2022 David R. Hanssen | ADM1370

Data Management and Extending Models

Excel provides several tools for managing data:

• Separate worksheets, (Named) Ranges, and Tables
• Sort & Filter Commands
• Data Validation (Dropdown Lists)
• Data Delivery Functions (Lookups, Choose)

However, there are design practices we can follow that help us make efficient use of
these tools:
• Data, Analysis, and Presentation “Layers”
• Flat/Matrix Data Vs. Tabular Data
• Managing Data Volume
• Documentation

© 2022 David R. Hanssen | ADM1370

Data Model Layers

• You can simply dump data into

Excel, manually or simplistically
calculate values, and create
reports all in the same worksheet,
however…

• … this can be hard to understand

and repeat if you need to repeat
the same analysis later.

© 2022 David R. Hanssen | ADM1370

Data Model Layers

• Spreadsheets are a tool that help us easily repeat calculations and analysis by
automating calculations and presentation, but only if we use them correctly.
• The Data-Analysis-Presentation Layer framework gives use a way to structure our work
so we can do just that.

Data Analysis Presentation

Store and add Convert data into Present information

data over time. information. to end users.

© 2022 David R. Hanssen | ADM1370

The Data Layer

• This layer becomes the “source” for your

Analysis layer

• Captures that you will need for your analysis:

– Financial transactions from a business
– Weather data from the environment

• Should be easy to update and can be used to

“clean up” messy data (missing values,
incorrect format)

• Tabular data is easier to update and use in

your Analysis layer than Flat/Matrix data

© 2022 David R. Hanssen | ADM1370

The Analysis Layer

• This layer becomes the “source” • Parts of this might be part of your
for your Presentation layer presentation layer depending on
the requirements of your end users
• Transforms your data into useful
(e.g. if building a financial
information:
statement, you might create a
– Sales Per Month
statement template, and use
– Changes in Temperature
formulas to calculate each line
– Changes in Consumer Demand
amount)
• This is where your formulas and
logic is built
• Sometimes referring to as
“staging” or “mapping” layer

© 2022 David R. Hanssen | ADM1370

The Presentation Layer

• This layer is the final result of your

efforts / data model

• Can contain text, numbers, and graphics

(charts, formatting)

• Educates the user on your analysis and

helps them take action.

• Can take the form of:

– Reports (Detailed Understanding)
– Dashboards (Monitoring)

© 2022 David R. Hanssen | ADM1370

Data Model Layers

• Separating your model into multiple layers allows you to change things within each layer
without drastically affecting the other layers.
– Adding more columns to your Data Tables won’t affect the logic of your analysis and
presentations.
– Performing additional analysis doesn’t require separating data from calculations.

Data Analysis Presentation

Store and add Convert data into Present information

data over time. information. to end users.
© 2022 David R. Hanssen | ADM1370
Managing Data Volume

While having extra data can be helpful, it can also detract from your work:
• Unused fields can confuse others.
• Unused records (rows) make calculations slower over time.
• Extra data increases file size, making it harder to share and collaborate with others.

Practices to consider:
1. Review and justify each field in your data tables (Is a person’s height important when
determining raises? Is age important when calculating a student’s grade?)
2. Consider what your analysis is trying to achieve and in what context (Are sales from 10
years ago for products no longer sold still relevant?)
3. Does your data need to be granular (very specific) or can it be aggregated (The sale of a
blue t-shirt at 11:32AM on a Tuesday Vs. Total shirts sold in the month of January)

© 2022 David R. Hanssen | ADM1370

To-Do and Coming Up (for Lecture 12):

To-Do: Coming Up:

• Watch the tutorial recordings and
complete the related exercises.
• Review your notes, textbook, and
slides for the upcoming midterm.
• Logic Formulas and Functions (IF,
AND, OR)
• Flowcharts and Decisions Trees
• Conditional Summary Functions
(SUMIF, COUNTIF, etc.)

© 2022 David R. Hanssen | ADM1370