IntroToSpreadsheetModeling

ProfessorMouwafacSidaoui

Definition
History
Examples
Spreadsheet and Business Analytics
Professor Mouwafac Sidaoui

Spreadsheet
What is a spreadsheet?
"spread sheet" or spreadsheet was and is a large
sheet of paper with columns and rows that
organizes data about transactions for a business
person to examine.
shows all of the costs, income, taxes, and other related
data on a single sheet of paper for a manager to
examine when making a decision.

electronic spreadsheet organizes information into

software defined columns and rows.
help a decision maker see the financial "big picture" for
the company.

Saturday,October19,2013

IntroToSpreadsheetModeling

ProfessorMouwafacSidaoui

Brief History of Spreadsheet

Spreadsheets have been used by accountants
and Analysists for hundreds of years
Computerized or electronic spreadsheets are
of much more recent origin.
Dan Bricklin is the "father" of the electronic
spreadsheet.
1978, as a Harvard Business School student, he
came up with the idea for an interactive visible
calculator
Bricklin and Bob Frankston co-invented software
program VisiCalc [visible calculator].

Dan Bricklin & Bob Frankston

Approximately 1980

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IntroToSpreadsheetModeling

ProfessorMouwafacSidaoui

What came after VisiCalc?

spreadsheet software was growing rapidly in
the early 1980s
VisiCalc were slow to respond
Legal business distractions led to new
development
In 1983 IBM responded
Mitch Kapor developed Lotus 123 and the
application quickly became the new industry
spreadsheet standard

Saturday,October19,2013

IntroToSpreadsheetModeling

ProfessorMouwafacSidaoui

What is Lotus 1-2-3?

Lotus 1-2-3 made it easier to use spreadsheets
and it added integrated charting, plotting and
database capabilities.
Lotus 1-2-3 established spreadsheet software
as a major data presentation package as well
as a complex calculation tool.
Lotus was also the first spreadsheet vendor to
introduce naming cells, cell ranges and
spreadsheet macros.

Lotus Life
1983, Lotus first year of operations, the
company reported revenues of $53 Million
and had a successful public offering.
1984, Lotus tripled in revenue to $156
Million.
1985, Lotus employees grew to over a
thousand. This rapid growth led to a
shakeout in the spreadsheet segment of the
personal computer software industry.
1985, Lotus Development acquired Software
Arts and discontinued the VisiCalc program.

Saturday,October19,2013

IntroToSpreadsheetModeling

ProfessorMouwafacSidaoui

What about Microsoft Excel?

The next milestone was the Microsoft Excel spreadsheet.
Excel was originally written for the 512K Apple Macintosh in
1984-1985.
Excel was one of the first spreadsheets to use a graphical
interface
Excel spreadsheet with a graphical user interface was easier.
Many people bought Apple Macintoshes so that they could
Excel spreadsheet program.
1987, Excel was one of the first application released for
Windows OS.
1989, Excel was Microsoft's flagship product
In the late spring of 1995, IBM acquired Lotus Development
and Microsoft Excel is the spreadsheet market leader.

Key Dates in the history of Microsoft Excel

1985 Excel 1.0 launched.

1986-88 Microsoft releases versions 1.0.6 and 1.5.

10/31/87 Launch of Excel 2.0 for MS-DOS version 3.0

1989 Launch of Excel 2.2 for Macintosh. New version includes

improvements in the calculation speed by 40% and added flexibility of
different styles within a single document.

12/9/90 Excel 3.0 is launched. This version includes Workbooks and is one
of the earliest Macintosh applications to offer Users Publish & Subscribe
functionality.

4/1/92 Microsoft Releases Excel 4.0 for Windows 3.1.

11/1/92 Excel 4.0a for Windows 3.1.

12/14/93 Excel 5.0; This version includes improved Workbooks and the
replacement for Excel Macro Language with Visual Basic.

7/27/95 Excel 7.0 for Windows 95/NT.

Saturday,October19,2013

IntroToSpreadsheetModeling

ProfessorMouwafacSidaoui

Spreadsheet Historic Summary

Visicalc was the first electronic spreadsheet on a
microcomputer,
It helped turn the Apple II computer into a popular and widely
used system.

Lotus 1-2-3 was the leading spreadsheet when DOS was the
dominant operating system.
Excel now has the largest market share on the Windows and
Macintosh platforms
A spreadsheet program is a standard feature of an office
productivity suite.
Since the advent of web apps, office suites now also exist in
web app form.

Other Spreadsheet Applications

Open Office www.OpenOffice.org

Apple iWork Numbers www.apple.com/iwork/numbers
Google Docs Spreadsheet http://docs.google.com
JMP, SAS Product www.jmp.com/software
Tableau www.tableausoftware.com
SPSS, IPM Product www.spss.com
many others

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IntroToSpreadsheetModeling

ProfessorMouwafacSidaoui

References

"VisiCalc '79: Dan Bricklin and Bob Frankston", Creative Computing, November 1984, vol. 10,
p. 122, 124.

"VisiCalc Production Ends", PC Magazine, August 6, 1985, vol. 4, p. 33.

Bajarin, T. "VisiCorp was PC software industry's training ground." PC Week, August 13, 1990,
v7 n32, p.117.

Browne, Christopher. "Historical Background on Spreadsheets", at URL

http://www.ntlug.org/~cbbrowne/spreadsheets.html, visited March 24, 1998; also checked
http://www.hex.net/~cbbrowne/spreadsheets.html 04/12/1999.

Claymon, D. "Profile: Mitch Kapor, The Lotus cofounder goes to bat for startups", Red Herring
Magazine, February 1999, URL www.herring.com/mag/issue63/news-profile.html.

Frankston, R. Email message, 04/15/1999a.

Frankston, R. Email message, 04/15/1999b.

Henderson, T.B., D.F. Cobb, G.B. Cobb. Spreadheet Software from VisiCalc to 1-2-3. Indianapolis:
Que Corp., 1983.

Kapor, M. Email message, 04/15/1999.

Mattessich, Richard. "Spreadsheet: Its First Computerization (1961-1964)", at URL

http://www.j-walk.com/ss/history/spreadsh.htm.

Pardo, R. Email message, 08/20/2004.

According to Bill Jelen mr. Excel

www.mrexcel.com

Did you
know?

Saturday,October19,2013

50% of Excel
users leave
80% of Excel
untouched...

IntroToSpreadsheetModeling

ProfessorMouwafacSidaoui

Definition of Spreadsheet Modeling

Spreadsheet modeling is a creative process, and thus
cannot be reduced to a simple recipe, every
spreadsheet passes through a predictable series of
four stages:
1.

Designing

2.

Building

3.

Testing

4.

Analysis

Modeling for insight requires skills in establishing a

base case, performing sensitivity analysis, using backsolving, and (when necessary) carrying out
optimization and simulation.

Basic Spreadsheet Modeling Concepts

Most mathematical models, including
spreadsheet models, involve:
1. Inputs given values that are fixed for the model
2. Decision variables under the control of the decision maker
3. Outputs determined by input and decisions variables

There isnt one best spreadsheet practice but

there are good habits to learn:

Saturday,October19,2013

Model must be readable, clear and logic

Separation of parts in spreadsheet
Clear headings for input decision and output variables
Use of rangenames
Use of various formatting (font, size, color)
Cell comments and text boxes for lists and explanations

IntroToSpreadsheetModeling

ProfessorMouwafacSidaoui

Turning Numbers into Knowledge

The Art of Estimation: Ping Pong Ball exercise
How many ping-pong balls could you fit into
the room?
1.

Take just 60 sec to answer the question

2.

Solving the same problem in 5 min (with a partner)

Take 10 min to make a list of the points that

you think these two exercises illustrate.

Ping Pong Ball Exercise

What type of model did you use?
You modeled in terms of categories such as few,
some, lots or tens, hundreds, thousands.
You drew a mental picture of a ping-pong ball
and looking around the room
You then estimated that the answer belonged in
one category rather than another

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IntroToSpreadsheetModeling

ProfessorMouwafacSidaoui

Turning Numbers into Knowledge: Ping

Pong Ball Exercise
Volumetric calculation
You might have estimated the volume of:

a ping-pong ball

volume of a room

divided one into another

Did you model the ping-pong ball as a cube rather

than a sphere?
Did you model the room as a large, empty box?
Did you ignore the furniture?
Did you assume that you were not allowed to squash
or deform the balls?

Turning Numbers into Knowledge: Ping

Pong Ball Exercise

Solving the same problem in 5 min (with a partner)

Keep a note of how you go about solving it.

How did you go about solving the problem this time?

Did you use the same procedure but refine your measurements?

Did you use the extra time to take a new approach?

Did you change your model?

Did you modify your assumptions? Did you, for example make a
correction for the furniture or the shape of the room?

What were the differences between working alone and working in a team?

Did you share tasks?

Did you start with similar ideas or did you spend time arguing about the
proper approach?

Given more resources (time and people), chances are you may have built a
more sophisticated model.

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IntroToSpreadsheetModeling

ProfessorMouwafacSidaoui

Turning Numbers into Knowledge: Ping

Pong Ball Exercise

What have you

learned about
modeling?

Online calculator
www.online-calculators.co.uk/volumetric/roomvolume.php

H
L
W

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