What you'll learn

Understand optimization problems and how they relate to financial planning and decision making
Use Excel Solver to define optimization and solve optimization problems
Learn how to maximize profit or minimize costs under constrained conditions
Solve hands-on problems in working capital management, capital budgeting, inventory management and product manufacturing mix optimization
Frameworks and financial model templates for business problem optimization

Course content

4 sections • 15 lectures • 2h 2m total length

Course introduction3:49
An introduction to the course, what you'll learn and walk away with at the end of it
What are optimization problems?3:33
A simple overview of the trade-offs in the allocation of scare resources as the basis of optimization
Types of optimization problems9:01
Dig into the fundamentals of general optimization problems through the application of a general linear programming example, and setting the stage for nonlinear programming
Optimization in corporate & business finance7:49
The application of linear and nonlinear optimization to business finance problems, including the three paradigms we cover in the course: long term capital budgeting, short-term working capital management and operations optimization.
Optimization and finance

Optimization apps and setting up Solver in MS Excel4:13
A brief on what an optimization engine is, and then a step-by-step guide to set up Solver in Excel (prepackaged free tool we use throughout the course)
A structured template for modeling financial optimization problems2:51
How to lay out financial models in Excel using options, characteristics, decision variables, constraints and the objective function.
Solving your first optimization problem in Solver10:18
Hands-on, basic word problem (Excel workbook included) in linear programming to determine the optimal number of storage racks used in a warehouse, based on storage constraints and budget.
Ready to optimize!

A word on Solver methods and debugging issues5:03
Understanding Solver's use of Simplex LP, GRG Nonlinear, and Evolutionary optimization methods, as well as common errors encountered and tips to get by them. (Includes a Debug Checklist PDF)
Practice #1: Capital Budgeting: Investment Debt/Equity Allocation11:57
Hands-on optimization of a debt/equity allocation across multiple investments, each with their own characteristic cashflow, and hence, return. Uses the included Practice 1 Excel workbook.
Practice #2: Product Manufacturing Mix12:01
Hands-on optimization of resources in a manufacturing facility to maximize profit. Uses the included Practice 2 Excel workbook.
Practice #3: Inventory Order Management15:19
Hands-on optimization of inventory ordering in order to minimize ordering and holding costs. Uses the Practice 3 Excel workbook included.
Practice #4: Working Capital Management - Investment16:16
Hands-on optimization of cash surplus working capital situation, in order to maximize short-term return on investment. Uses the included Practice 4 Excel workbook.
Practice #5: Working Capital Management - Financing13:08
Hands-on optimization of cash deficit working capital situation, in order to minimize short-term debt interest and fees. Uses the included Practice 5 Excel workbook.

Summary of financial planning optimization3:51
Brings together the content covered of what optimization is, how it applies to corporate and business finance, and the paradigms to keep in mind when solving your own business optimization problems.
Resources and further avenues of exploration3:38
Recap of resources available to you and a brief exploration of the many business fields you can apply the skills learnt in the course, from airline ticket pricing through supply-chain scheduling, investment diversification and others.

Requirements

Familiarity with using Microsoft Excel
Familiarity with basic financial concepts such as profit, capital and inventory management
Readiness to develop financial models in Excel (all guided)

Description

This course brings together the worlds of computational math and finance to develop next-level proficiency in financial business planning and decision making optimization - all within Excel.

Mathematical optimization (rather than process or engineering optimization) allows us to maximize profit under nearly any type of constraint such as budget, capital availability, production capacity, materials availability, and scheduling times.

In this course, you will not only learn how optimization is applied in finance and how to use and master optimization solvers, but also how to lay out a well-structured financial model in any scenario.

In each of the hands-on practice sessions, we spend time covering all the financial concepts used as well as laying out the right quantitative model fit. These practice examples cover capital allocation across investments, working cash management, manufacturing input scheduling, and inventory order management.

The course comes with 7 great downloadable resources, including 6 Excel financial models as well as a helpful Solver debugging PDF. You'll use these resources while working through the examples in the course but can also re-use and modify them for your own optimization needs.

Once you have completed this course, you will be able to manage and model any of these domains with skill and insight, and maximize profit or minimize cost accordingly.

Who this course is for:

Financial managers and accountants
Entrepreneurs getting to grips with financial planning
Operational leadership
Quantitative analysts
Business school students

What you'll learn

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Course content

Introduction to business finance optimization4 lectures • 24min

Getting familiar running optimizations in Excel with Solver3 lectures • 17min

Hands-on finance optimization6 lectures • 1hr 14min

Exploring further2 lectures • 7min

Requirements

Description

Who this course is for: