 |
Download a pdf copy of this help file here |
|
Download a pdf copy of this help file here |
Targets are the variables that are to be optimized. For example, one might
wish to minimize the expected (mean) cost of a project or number of people
made redundant; or maximize the expected profit of a venture; or minimize
the standard deviation (spread) of the performance specification of a
machine; or minimize the 99th percentile of potential trading losses.
Clicking the Add button in the Targets tab opens a dialog for you to select the spreadsheet location where the decision target is to be placed. This is then entered into the Address field and can be edited later by double-clicking this field.
Address is the cell position of
the decision target that is to be monitored. This cell should already
have a formula entered for the Optimizer to work with.
Name is a text field that identifies the target.
Type provides a list of options: minimize; maximize; or set to a specific value (Value). If one chooses ‘Value’ the Value field is enabled to enter the desired target value.
Statistic is used to specify the statistic when the Value option has been selected for Type. Options are: Mean; Median; a Percentile (in which case the Percentile value field becomes active requiring an input on (0,1)); Min; Max; StDev (standard deviation); Variance; Range (the difference between the minimum and maximum observed values); Skewness; Kurtosis; CofV (coefficient of variation); CVaRp and CVaRx (Conditional value at risk calculations); and FinValue (the final value of a simulation, used if one builds a model that simulates across iterations in some way).
Enabled switches the target definition on and off: ticked (=TRUE in the Excel function) indicates it is active, not ticked (FALSE) indicated that it is disabled. This allows one to have several targets defined in the model and build controls that switch those targets on and off.
Entering the information as shown above and selecting OK will add this target definition to the Optimization Settings:
In Cell C27 of the model the following ModelRisk function has now been added:
=[formula]+VoseOptTargetMaximize("Total profit","Mean",TRUE)
where [formula] is the original Excel formula that was in this cell.
ModelRisk incorporates three functions for defining target cells to optimize:
VoseOptTargetMaximize(Name, Statistic, Enabled) for a variable to maximize
VoseOptTargetMinimize(Name, Statistic, Enabled) for a variable to minimize
VoseOptTargetValue(Name, Statistic, Value, Enabled) for a variable to set as close as possible to a specific Value
Options for the function parameters are:
Name: a text string describing the variable to be optimized
Statistic: “Mean”; “Median”; a value between zero and one for the Percentile option, “Min”, “Max”, “StDev”, “Variance”, “Range”, “Skewness”, Kurtosis”, and “FinValue”
Value: any real value (VoseOptTargetValue only)
Enabled: a Boolean parameter taking either TRUE (or equivalently 1) when the target definition is to be used, or FALSE (or equivalently 0) when the target definition is not to be used.
Example model