The Decision Support System - Spreadsheet Model (return to DSS home)

The model used in this project was the Total Industry Demand model.

Inputs include the following:

1. Average Industry Advertising (AvgAdv)

2. Average Industry Price (AvgPrice)

Both can be determined using statistical analysis on historical data.

3. Firm Advertising [AvgAdv * AREL]

4. Firm Price [AvgPrice * PREL]

These variables are most important to management and must be optimized.

5. The number of firms in the industry (n)

6. Last quarter's firm demand (RD1 = FD lastqtr / TID lastqtr )

7. Quarter Interested (t)

The values of these variables are readily available.

The outputs in our model include the following:

1. Relative Demand [RD = f (PREL, AREL, RD1)]

2. Market Share [MS = RD/n]

3. Total Industry Demand [TID = f (t, AvgPrice, AvgAdv)]

4. Firm Demand [FD = TID * RD / n]

5. Your firm's Relative Advertising (AREL)

6. Your firms Relative Price (PREL)

Click here for the interactive model.

This support system is useful to managers by allowing them to perform sensitivity analysis, goal seeking, and scenario analysis.