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û Modelling of objectsû Modelling of Data

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û Allows you to create virtual representations of objects such as :-› Buildings› Cars

û You can look at the effect of outside influences.› Impact› Earthquakes› Fire› Explosions

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û Possible to see different layers › Internal View› External View› Wireframe› Electrical systems

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û The ability to ask questions of the model.û Changing components to see the effect

or how it reacts.û Effects can be gauged at the touch of a

button.û Without having the risk of building the

real thing.

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û Mathematical modellingû Predictions in Finance

› Using spreadsheets› Allows replication of values› Allows sequences to be setup› Allows What If Scenarios to be modelled

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û What features make spreadsheets ideal for modelling?› Functions› Formulae› Variables› Automated calculations

(refreshed)› Great for trying out different

scenarios

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û Variables› An identifier associated with a value stored in

the model. The value may be in a cell or in memory

û Formulae› Formulae allow calculations to be represented in

a spreadsheet. As well as numbers, a formula uses the addresses of cells to identify other values to be used. The result is placed in the cell in which the formula was placed

› If any of the cells used on the formula change their value, the result of the formula is updatedñ E.g (I2-2*B3)/2

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û These are special types of formulae used in a spreadsheet

û They are used to represent formulae that may be too large or complex for the ordinary user to enter:› SUM() – to add a range of numbers› AVERAGE() – to calculate the average of a range › HLOOKUP() – to find one value based on another in a

horizontal list› VLOOKUP() – to return a value based on another in a

vertical list› IF() – to make a decision based on a value and

give an answer whether its TRUE or FALSE

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û Rules are a set of procedures that must be followed. For example, if a calculation requires two values, then these values must be supplied.

û Validation rules ensure that data entered meets a criteria or is present.

û Could be coding:-For each cadidate

For each moduleEnter a UMS mark

Add all the marks togetherLookup the mark in the grade tableReturn a grade

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û Answering ‘what-if?’ questions › A model can recalculate values – this allows

single values to be changed and the rest of the model to be updated automatically

› Various combinations can be tried with minimal effort

› ‘What if’ questions are predictive by nature

û Advantages of using a data model for ‘What if?’ questions:› Only one model needs to be created and

then altered› Many different possibilities can be tried -

repeatability› Mistakes can be eradicated prior to

construction› Cost of creating a changeable model against

several different models› Safety of the model – nuclear explosion, trip to

Mars. Virtual Vs Physical models.› Control over the variables

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û Drawbacks of using spreadsheets to create or run a spreadsheet

› Model may not be an accurate representation of the real world.

› If the model relates to people then an accurate result may not be given.

› Many Variables need to be considered and it is easy to miss things out.

› Producing effective models can take a lot of time and may need expensive hardware and software.

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û Worksheets and Workbooks› A number of worksheets within a single file is called a workbook. A

workbook can be used to divide information between different sheets, for example income on one sheet, expenditure on another,and a summary on a third

û Rows› Rows are a horizontal group of cells. In Excel they are identified by

Numberû Columns

› Columns are a vertical groups of cells. In Excel they are identified by Letter

û Cells› A cell is the square on a spreadsheet in which only a single entry

can be placed. The entry can be text, numbers or a formula. It can be referred to by its address based on its row and column

û Ranges› A range is a group of cells – usually identified by the address of the

top left cell to the bottom right cell: A1:G5 for example

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û Replication is the process of copying a formula from one cell to another› As a formula usually involves references to cells, it is

necessary to know whether you want to keep the references the same (absolute reference) or change according to the row or column movement (relative reference)

û An absolute reference always refers to the same cell. Anchors are created using $ sign eg. $A$3. Anchors are needed on either Rows or Columns.

û A relative reference changes the cell it references according to the movement of the target cell. There are no anchors on relative references such as A3

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The formula in Cells C2:C4 is replicated using both relative and absolute replication.

When the cell is replicated down, the reference to B2 needs to change so that the price changes.

A B C D

1 Good Price VAT Payable VAT

2 Pen £50 =B2*$D$2 17.5%

3 Watch £200 =B3*$D$2

4 Ring £500 =B4*$D$2

However, the reference to cell D2 cannot change. If it was to change to cell D3 the formula would not work, as there is nothing in cell D3. Therefore as C2 is replicated, the reference to B2 needs to change, hence it is a relative reference, but the reference to D2 must not change, so it is absolute.

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û Form Controls› They include items like:ñ Spinnersñ Drop down boxesñ Buttons

› They are used to increase the usability of the spreadsheet – list/drop down boxes can limit data entry, making validation easier!

› Buttons can run Macros