Using Optimization Parameter Analysis in Analytic Solver

As we discussed in Chapter 15, we could perform sensitivity analysis for an optimization model
by either changing data in the model and re-solving, it or by examining the Sensitivity Report.
Analytic Solver provides an alternative approach, called parameter analysis. With this approach,
you can automatically run multiple optimizations while varying model parameters within
predefined ranges.

Example: Single Parameter Analysis for the SSC Problem

Suppose that we wish to investigate the impact of changing the amount of time available in the
Finishing department, which is currently 21 hours, between 10 and 60 hours. First, we need to
define a range of values for this parameter. Choose an empty cell in the spreadsheet, say F1,
and then click on the Parameters button in the Analytic Solver ribbon and choose Optimization.
In the Function Arguments dialog that appears, enter the lower, upper, and, optionally, the
base case values, as shown in Figure 1. Click OK, and then replace the value in cell D7 by the
reference to cell F1; that is, with the formula =F1. Next, from the Reports button in the Analysis
group in the Analytic Solver ribbon, select Optimization Reports and then Parameter Analysis. A
Multiple Optimizations Report dialog appears (the completed dialog is shown in Figure 2). Select
the variables in cells B14 and C14 and the objective in cell D22 and move them to the window
at the right. (You might encounter a situation in which the variables are not displayed in the
dialog. Should this be the case, click on the Model button at the left of the Analytic Solver
ribbon. In the Model tab in task pane at the right of the spreadsheet, click on your variables. In
the window below, make sure that “Monitor Value” is TRUE.) Also select the parameter we
defined in cell F1 and move it to the window on the right. The number in the Major Axis Points
field at the bottom of the dialog specifies the number of values between the lower and upper
limit that Solver will test; if we want to test values 10, 20, 30, 40, 50, and 60, then change this to
6. In the drop-down box, select Vary All Selected Parameters Simultaneously. Solver will solve
the model for each parameter value and insert a new worksheet called Analysis Report in the
workbook. Figure 3 shows the results. Column A shows the value of the parameter (finishing
hours); columns B and C show the optimized values of the decision variables; and column D
shows the value of the objective function. This shows that after 40 hours, there is no
improvement in the solution. We could, of course, obtain more detailed information by
increasing the number of test values. In using this tool, we encourage you to reformat the
results to make them easier to understand. For example, in Figure 3, name the columns with
descriptive labels instead of cell references. You could also use charts to visualize the results.

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2 Analytic Solver

Figure 1 Function Arguments Dialog for Finishing Constraint Parameter

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 Optimization Parameter Analysis 3

Figure 2 Multiple Optimizations Report Dialog

Figure 3 Single Parameter Analysis Results

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4 Analytic Solver

Example: Multiple Parameter Analysis for the SSC Problem

Analytic Solver also allows you to run multiple optimizations by varying two or more
parameters. For example, suppose that we wish to examine the effect on the optimal profit of
changing both the Fabrication and Finishing hour limitations, similar to a two-way data table.
We follow the procedure in the example above to define the parameter for the Finishing
limitation. In this case, we also specify a new cell (e.g., F2) for the Fabrication hour parameter.
In the Function Arguments dialog, set the range for the Fabrication limitation between 50 and
100. and replace cell D6 with the formula =F2. Next, from the Reports button, select
Optimization Reports and then Parameter Analysis. In the Multiple Optimizations Report dialog
(see Figure 4), choose both parameter cells F2 and F3; however, we can only choose one result
cell. In this case, we choose $D$22, which represents the objective function value. In the drop-
down box, select Vary Two Selected Parameters Independently. Solver will create a two-way
table (actually a PivotTable) shown in Figure 5. This gives the optimal profit for each
combination of the Finishing and Fabrication limitations (again, we encourage you to replace
the cell references by descriptive labels for better interpretation of the results).

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 Optimization Parameter Analysis 5

Figure 4 Multiple Optimizations Report Dialog for Multiple Parameter Analysis

Figure 5 Multiple Parameter Analysis Results

You might try this technique for the Anderson Village example in the text to evaluate
the trade-offs between the response time and minimum number of fire stations needed to
replicate the results.

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