Iteration Example - Tandy 600 Owner's Manual

188
Iteration Example
Because the formulas for Net Profit and Bonus depend on each other for
their solutions, they are circular references.
The following model shows how to use iteration to solve a simple circular
reference. This model is designed to calculate a bonus that is 10% of net
profit.
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5
Gross Profit (G P)
=
$1.000.00
Net Profit (NP)
=
Gross Profit - Bonus
Bonus (B)
=
Net Profit
*
10%
Note that subsequent evaluations of DELTA normally include changes to
the cell with the first DELTA operation. The simple formula, DELTAO, is
usually not sufficient to isolate local DELTA values. Instead, enter a
formula such as: IF(TRUEO,"",DELT A()). This clears the maximum
DELT A, appears blank on the screen, and presents no value for the
following DELTA to evaluate.
If you enter the DELTA operation as a completion test and the ITERCNT
operation by itself, divergence may occur. DELTA also reads the cell that
contains the ITERCNT operation. Because ITERCNT changes by I for
each iteration, DELTA always returns at least 1 unless you set up the
model to return local DELTA values or you eliminate the ITERCNT
operation. An ITERCNT formula (ITERCNT( )
>
20, for example)
always returns TRUE or FALSE, and does not affect convergence.
#1 2 3 4
1 DELTA
2 ////////////////////////////////
3 ////////////////////////////////
4 ////////////////////////////////
5 ---DELTA
~~~~--JCW:d
DELTA
A better model design is:
First DELTA
The Gross Profit is entered in R I C2. The Bonus formula, NP
*
.10, is
entered in R2C2. The Net Profit formula, RIC2 - B, is entered in R3C2.
The results of the calculations are: