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Here's a quick riddle that has yieled many incorrect responses. Even though many entrepreneurs can solve the riddle without the aide of a computer, using Excel will give one practice in the fundamentals of designing a spreadsheet and using solver.
Setting up your spreadsheet
Your spreadsheet will have 3 entries with a corresponding constraints section, as below.
The total cost is $1.10 (C8), which we calculate by adding the prices of the bat (C5) and ball (C6).
The price of the bat (P_bat) is $1.00 more than the price of the ball (P_ball). We show that in H6, where we add $1.00 to P_ball (C6).
Setting up solver
The objective is to ensure that the total price is $1.10: set C7 to $1.10.
The decision variable is the item whose value you wish to find: in our case, the price of the ball (C6).
In our example, the constraints are already built into the spreadsheet, so there's no need to repeat them in the Constraints box.
Use Simplex LP for spreadsheets that use simple arithmetic calculations (+, -, x, or ÷).
Final solution
Run solver and evaluate the solution it came up with. The key to solver is ensuring that all your constraints have been met.
This example is extremely easy and likely achievable without solver. However, as your business calculations become more complicated, the fundamentals of setting up your spreadsheet and placing appropriate constraints on values become more important.
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