8. Modelling
A model allows you to try out different scenarios to see what would happen if you made a change without any of the risks of actually having to do them in real life.
The spreadsheet above is a simple model for a shop selling CDs.
It could be used to test out things like:
- what would happen to the total profit if the number of 'Back to Bedlam' CDs rose to 3,000?
- what would happen to the profit per item if the commission on 'Keys to the World' rose to £2.50?
- what would happen to the total profit if the commission on 'Keep on' dropped to £0.75?
The shop wouldn't want to try these things out for real until they were sure of the effects.
Spreadsheets are excellent for modelling because of the following features:
- Formulas
- Goal Seek
- Regression analysis
- Graphs and charts
Challenge see if you can find out one extra fact on this topic that we haven't already told you
Click on this link: Spreadsheet Modelling