ISOM5810: Business Modeling and Optimization
(MSc in Global Operations)
Instructor:
Prof. Shaohui Zheng (imzheng@ust.hk,http://imzheng.people.ust.hk, LSK4014, Ext. 7751); Office hours: 10:30am - 11:30am on Tuesday.
Teaching Assistant:
Mr. Edmond Ho (imhcf@ust.hk, LSK 4065, Ext. 8543)
This course will focus on modeling and problem-solving using Excel. The emphasis will be on building useful models for analyzing and solving practical problems. This is a hands-on course and we will adopt a workshop approach to learning. The teaching methods will include: mini lectures, demonstrations and practical exercises. Students will be exposed to a variety of managerial problems and their modeling skills will be enhanced around the following aspects: working with Excel; using formulas; manipulating information; analyzing business problems; identifying optimal decisions.
The course has a two-fold purpose. First, it introduces students to simple models that provide powerful and often surprising qualitative insights about a large spectrum of managerial problems. Second, it gives students a general idea for the kinds of problems that can be tackled quantitatively, the methods available for doing so, and the relevant data that needs to be gathered.
Reference Book:
• Practical Management Science, 6th Edition, by Albright and Winston, Cengage, 2019.
Software:
• Excel 2021 for Window will be used through the whole course. Excel 2010 or any other later version of Excel, including those for Mac, could also be used by students.
Grading:
• Class attendance: 10%
• Homework: 20%
• Quiz: 20%
• Final examination: 50%
• Bonus point for class participation: 5%
Class Schedule / Sample Applications
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1
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Spreadsheet Modeling 1: Personal Finance, Inventory Planning; How to create good spreadsheet model for decision making
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2
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Spreadsheet Modeling 2: Cost Projection, Mortgage / Tax Calculation, Breakeven Analysis, Data Fitting, Simple Pricing Optimization
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3
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Linear Optimization Model: Product Mix, Multi-period production, Staffing
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4
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(a) Sourcing and Contracting in Supply Chains; (b) Quiz.
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5
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Network Optimization Model: Transportation, Assignment
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6
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Network Optimization Model: Logistics, Shortest path, Maximum flow Integer Programming Model: Investment, Production with fixed cost
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7
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Integer Programming Model: Set covering
Non-Linear Optimization Models: Pricing, Portfolio optimization
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8
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Final Examination
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Important Policies
1. Any student who misses more than two lectures will receive an F grade.
2. There will be two kinds of assignments: Homework and Exercise. Homework needs to be submitted by the due date, while Exercise is for practice only and does not need to be submitted.
3. No make-up quiz: if you miss the quiz for any reason, its weight of 20% will be shifted to the final examination automatically.
4. You are encouraged to do homework in teams of up to three. Every team member must participate in doing the homework sets. As insurance, at least two members should work independently on each problem.
5. Homework answers should be submitted to "Homework" in Canvas by the due time. Each team is supposed to submitted one set of answers.
6. AI policy: you may use generative AI to help solving the homework problems when possible.
Study Hints
1. You do not need to read in advance for a class.
2. Attend all lectures and treat the in-class exercises seriously.
3. After class (and as soon as possible), you should redo the examples covered in class from scratch.
4. If you are not already familiar with the basics of Excel, you need to work harder to get
started. We will do extensive exercises in class. If you do Steps 2 & 3 and work on all the assignments, you will soon be an expert.
Peer review for group work
It is expected that every teammate will contribute actively to homework assignments. If you believe that any of your teammates have not made enough contribution to the assignments, you may email me a peer evaluation before the final examination. You do not need to do the peer evaluation if you believe that all your teammates should receive the same score, which I hope is the norm, not the exception.