Portfolio optimization - creating 'efficient portfolios' - involves deciding how much money to invest in stocks or bonds to maximize return for a given level of risk, or to minimize risk for a target rate of return. Working capital management involves deciding how much cash to allocate to different purposes (accounts receivable, inventory, etc.) across multiple time periods, to maximize interest earnings.Ĭapital budgeting involves deciding how much money to invest in projects that initially consume cash but later generate cash, to maximize a firm's return on capital.

Here are some representative examples of optimization problems: Finance and Investment The 'best' or optimal solution might mean maximizing profits, minimizing costs, or achieving the best possible quality. In each case, multiple decisions need to be made in the best possible way while simultaneously satisfying a number of logical conditions (or constraints). The 'something' might involve allocating money to investments, or locating new warehouse facilities, or scheduling hospital operating rooms. Solvers, or optimizers, are software tools that help users determine the best way to do something. This tutorial addresses the following questions:Īfter completing this tutorial, you can learn even more about topics such as linearity versus nonlinearity and sparsity in optimization models by completing our Advanced Tutorial. Need help with another chemical engineering topic? Take a moment to look at the many short tutorials available from the Learn ChemE playlists. Or if you're looking for greater depth and detail, check out some of AIChE's Academy courses, including a large number that are free.Welcome to our tutorial about Solvers for Excel and Visual Basic - the easiest way to solve optimization problems - from Frontline Systems, developers of the Solver in Microsoft Excel. Clough, the author of the blog series, and combines two of AIChE’s most popular spreadsheet courses, Spreadsheet Problem-Solving for Chemical Engineers and Excel VBA Programming for Chemical Engineers. If you're looking for more in-depth instruction, check out AIChE’s virtual combo course on spreadsheet problem solving and VBA programming. It’s taught by David E. If you're looking for other tips for Excel, consider checking out our popular series Excel Tips for Chemical Engineers. In specific, you'll see two nonlinear equations solved in a dew point calculation for Raoult's Law using Solver.

Trying to figure out how to get Excel to solve multiple nonlinear equations at once? In this video tutorial from Learn ChemE, you'll see a demonstration that uses Excel Solver to handle three equations simultaneously.

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