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Figure 6.17 Spreadsheet model for Example 6.6.

Figure 6.18 First level of branching.

Figure 6.19 Second level of branching.

Figure 6.20 Final status of tree search.

Chapter 07

Figure 7 1 Solution to Example 7 1 with international constraint

Figure 7 2 Solution to Example 7 1 with mutually exclusive constraint added

Figure 7 3 Solution to Example 7 1 with contingency constraint added

Figure 7.4 Total cost with fixed and variable components.

Figure 7.5 Solution to Example 7.2 with variable profits optimized.

Figure 7.6 Spreadsheet layout for Example 7.2 in traditional format.

Figure 7.7 Alternative layout for Example 7.2.

Figure 7.8 Cost trade-off in facility location.

Figure 7.9 Spreadsheet model for Example 7.3.

Figure 7 10 Optimal solution for Example 7 3

Figure 7 11 Alternative model for Example 7 3

Figure 7 12 Optimal solution for the unconstrained model

Figure 7 13 Optimal solution for the alternative unconstrained model

Figure 7.14 Spreadsheet model for Example 7.4.

Figure 7.15 Distance array and decision array for Example 7.5.

Figure 7.16 Solution to the assignment model for Example 7.5.

Figure 7.17 Solution for Example 7.5 with one elimination constraint.

Figure 7.18 Solution for Example 7.5 with two elimination constraints.

Figure 7.19 Solution for Example 7.5 with three elimination constraints.

Figure 7 20 Solution for Example 7 5 with integer requirements

Figure 7 21 Optimal solution for Example 7 5

Exhibit 7 1 Potential Warehouse Locations for the New Region

Exhibit 7 2 Cost Structure at a Typical Warehouse

Chapter 08

Figure 8.1 Examples of nonsmooth functions.

Figure 8.2 Hypothetical nonlinear objective function.

Figure 8.3 Spreadsheet model for Example 8.1.

Figure 8.4 Spreadsheet model for Example 8.2.

Figure 8.5 A concave function.

Figure 8 6 A convex function

Figure 8 7 A convex region

Figure 8 8 A nonconvex region

Figure 8 9 Spreadsheet for Example 8 3

Figure 8.10 Spreadsheet for Example 8.4.

Figure 8.11 Linear and nonlinear objective functions.

Figure 8.12 Spreadsheet for Example 8.5.

Figure 8.13 Sensitivity Report for Example 8.5.

Figure 8.14 Spreadsheet model for Example 8.6.

Figure 8.15 The efficient frontier in Example 8.6.

Figure 8.16 Spreadsheet model for Example 8.7.

Figure 8.17 Optimal solution for Example 8.7.

Figure 8 18 Spreadsheet for Example 8 7 with absolute value objective

Figure 8 19 Spreadsheet for Example 8 7 with absolute value objective

Chapter 09

Figure 9 1 Spreadsheet model for Example 8 3

Figure 9.2 Evolutionary tab in the Options window.

Figure 9.3 Best solution found for Example 8.3.

Figure 9.4 Spreadsheet for Example 7.4.

Figure 9.5 Specifying the alldifferent constraint.

Figure 9.6 Final solution for Example 7.4.

Figure 9.7 Spreadsheet model for Example 7.5.

Figure 9 8 Final solution for Example 7 5

Figure 9 9 Initial model for Example 9 1

Figure 9 10 Modified model for Example 9 1

Figure 9 11 Spreadsheet model for Example 9 2

Figure 9.12 Spreadsheet model for Example 9.2.

Figure 9.13 Final solution for Example 9.3.

Figure 9.14 Spreadsheet model for Example 9.4.

Figure 9.15 Final solution for Example 9.3.

Exhibit 9.1 Wave Concept Statement

Appendix 2

Figure A2 1 Sketch of first constraint

Figure A2 2 Sketch of second constraint

Figure A2 3 Sketch of third constraint

Figure A2 4 Sketch of objective function lines

Figure A2.5 Sketch of optimal point.

Appendix 3

Figure A3.1 Simplex tableau.

OPTIMIZATIONMODELINGWITH SPREADSHEETS

Third Edition

Copyright © 2016 by John Wiley & Sons, Inc All rights reserved

Published by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc , 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4470, or on the web at www copyright com Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www wiley com/go/permissions

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Library of Congress Cataloging-in-Publication Data:

Baker, Kenneth R., 1943–Optimization modeling with spreadsheets / Kenneth R Baker – Third Edition

pages cm

Includes bibliographical references and index

ISBN 978-1-118-93769-3 (hardback)

1 Mathematical optimization 2 Managerial economics–Mathematical models 3 Electronic spreadsheets 4 Programming (Mathematics) I Title

HB143.7.B35 2015 005 54–dc23 2015011069

Cover image courtesy of Kenneth R Baker

PREFACE

This is an introductory textbook on optimization that is, on mathematical programming intended for undergraduates and graduate students in management or in engineering The principal coverage includes linear programming, nonlinear programming, integer programming, and heuristic programming; and the emphasis is on model building using Microsoft® Office Excel® and Solver

The emphasis on model building (rather than algorithms) is one of the features that make this book distinctive. Most textbooks devote more space to algorithmic details than to formulation principles. These days, however, it is not necessary to know a great deal about algorithms in order to apply optimization tools, especially when relying on the spreadsheet as a solution platform.

The emphasis on spreadsheets is another feature that makes this book distinctive. Few textbooks devoted to optimization pay much attention to spreadsheet implementation of optimization principles, and many books that emphasize model building ignore spreadsheets entirely Thus, someone looking for a spreadsheet-based treatment would otherwise have to use a textbook that was designed for some other purpose, such as a survey of management science topics, rather than one devoted to optimization.

WHYMODELBUILDING?

The model building emphasis derives from an attempt to be realistic about what management and engineering students need most when learning about optimization. At an introductory level, the most practical and motivating theme is the wide applicability of optimization tools To apply optimization effectively, the student needs more than a brief exposure to a series of numerical examples, which is the way that most mathematical programming books treat applications With a systematic modeling emphasis, the student can begin to see the basic structures that appear in optimization models and, as a result, develop an appreciation for potential applications well beyond the examples in the text.

Formulating optimization models is both an art and a science, and this book pays attention to both. The art can be refined with practice, especially supervised practice, just the way a student would learn sculpture or painting. The science is reflected in the structure that organizes the topics in this book. For example, there are several distinct problem types that lend themselves to linear programming formulations, and it makes sense to study these types systematically In that spirit, the book builds a library of templates against which new problems can be compared. Analogous structures are developed for the presentation of other topics as well

WHYSPREADSHEETS?

Now that optimization tools have been made available with spreadsheets (i.e., with Excel), every spreadsheet user is potentially a practitioner of optimization techniques No longer do practitioners of optimization constitute an elite, highly trained group of quantitative specialists who are well versed in computer software Now, anyone who builds a spreadsheet model can call on optimization techniques and can do so without any need to learn about specialized software. The basic optimization tool, in the form of Excel’s Standard Solver, is now as readily available as the spellchecker. So why not raise modeling ability up to the level of software access? Let’s not pretend that most users of optimization tools will be inclined to shop around for algebraic modeling languages and industrial-strength “solvers” if they want to produce numbers. More likely, they will be drawn to Excel.

Students using this book can take advantage of even more powerful software packages (Analytic Solver Platform and OpenSolver) by using the material in the online appendices For the instructor who wants students to be working on one of these platforms, the book provides sufficient information to get started and to learn the user interface

WHAT’SSPECIAL?

Mathematical programming techniques have been invented and applied for more than half a century, so by now they represent a relatively mature area of applied mathematics There is not much new that can be said in an introductory textbook regarding the underlying concepts. The innovations in this book can instead be found in the delivery and elaboration of certain topics, making them accessible and understandable to the novice. The most distinctive of these features are as follows:

The major topics are not illustrated merely with a series of numerical examples Instead, the chapters introduce a classification for the problem types. An early example is the organization of basic linear programming models in Chapter 2 along the lines of allocation, covering, and blending models. This classification strategy, which extends throughout the book, helps the student to see beyond the particular examples to the breadth of possible applications.

Network models are a special case of linear programming models. If they are singled out for special treatment at all in optimization books, they are defined by a strict requirement for mass balance. Here, in Chapter 3, network models are presented in a broader framework, which allows for a more general form of mass balance, thereby extending the reader’s capability for recognizing and analyzing network problems.

Interest has been growing in data envelopment analysis (DEA), a special kind of linear programming application. Although some books illustrate DEA with a single example, this book provides a systematic introduction to the topic by providing a patient, comprehensive treatment in Chapter 5.

Analysis of an optimization problem does not end when the computer displays the numbers in an optimal solution Finding a solution must be followed with a meaningful interpretation of the results, especially if the optimization model was built to serve a client. An important framework for interpreting linear programming solutions is the identification of patterns, which is discussed in detail in Chapter 4.

The topic of heuristic programming has developed somewhat outside the field of optimization. Although various specialized heuristic approaches have been developed, generic software has seldom been available. Now, however, the advent of the evolutionary solver brings heuristic programming alongside linear and nonlinear programming as a generic software tool for pursuing optimal decisions The evolutionary solver is covered in Chapter 9

Beyond these specific innovations, as this book goes to print, there is no optimization textbook exclusively devoted to model building rather than algorithms that relies on the spreadsheet platform The reliance on spreadsheets and on a model building emphasis is the most effective way to bring optimization capability to the many users of Excel.

WHAT’SNEW?

The Third Edition largely follows the topic coverage of the previous edition, with one important change. In the new edition, the presentation is organized around the use of Excel’s Solver. More advanced software, such as Analytic Solver Platform or OpenSolver, might be preferred by some instructors, so the Third Edition provides support for both of these in online appendices. However, students need access to no software other than Excel in order to follow the coverage in the book’s nine chapters

The set of homework exercises has been expanded in the Third Edition Each chapter now contains about ten homework exercises, most of which appeared in the previous edition. In addition, a supplementary set of homework exercises can be found online for instructors who are looking for a broader set of exercises or for students who want additional practice.

THEAUDIENCE

This book is aimed at management students and secondarily to engineering students In business curricula, a course focused on optimization is viable in two situations. If there is no required introduction to management science at all, then the treatment of management science at the elective level is probably best done with specialized courses on deterministic and probabilistic models. This book is an ideal text for a first course dedicated to deterministic models If instead there is a required introduction to management science, chances are that the coverage of optimization glides

by so quickly that even the motivated student is left wanting more detail, more concepts, and more practice This book is also well suited to a second-level course that delves specifically into mathematical programming applications.

In engineering curricula, it is still typical to find a full course on optimization, usually as the first course on (deterministic) modeling Even in this setting, though, traditional textbooks tend to leave it to the student to seek out spreadsheet approaches to the topic, while covering the theory and perhaps encouraging students to write code for algorithms This book can capture the energies of students by covering what they would be spending most of their time doing in the real world building and solving optimization problems on spreadsheets.

This book has been developed around the syllabi of two courses at Dartmouth College that have been delivered for several years One course is a second-year elective for MBA students who have had a brief, previous exposure to optimization during a required core course that surveyed other analytic topics A second course is a required course for engineering management students in a graduate program at the interface between business and engineering. These students have had no formal exposure to spreadsheet modeling, although some may previously have taken a survey course in operations research. Thus, the book has proven to be appropriate for students who are about to study optimization with only a brief or nonexistent exposure to the subject.

ACKNOWLEDGMENTS

As I wrote in the preface to the first edition, I can trace the roots of this book to my collaboration with Steve Powell. Using spreadsheets to teach optimization is part of a broader activity in which Steve has been an active and inspiring leader, and I continue to benefit from his colleagueship. Several people contributed to the review process with constructive feedback and suggestions. For their help in this respect, I want to acknowledge Tim Anderson (Portland State University), David T Bourgeois (Southern New Hampshire University), Jeffrey Camm (University of Cincinnati), Ivan G. Guardiola (Missouri University of Science & Technology), Rich Metters (Texas A&M University), Jamie Peter Monat (Worcester Polytechnic Institute), Khosrow Moshirvaziri (California State University, Long Beach), Susan A Slotnick (Cleveland State University), and Mohit Tawarmalani (Purdue University).

The Third Edition makes only minor changes in the coverage of the previous edition, the main exception being the reliance on Excel’s Solver To make this software emphasis possible, it was critical to have an updated package for sensitivity analysis, and this was accomplished in a timely and professional manner by Bob Burnham In addition, there were many details to manage in preparing a new manuscript, and I was helped by several people willing to pay attention to details in order to improve the final product. I particularly want to thank Bill MacKinnon, Alex Zunega, and Geneva Trotter for their efforts.

Once again, I offer sincere thanks to my current editor, Susanne Steitz-Filler, for her support in planning and realizing the publication of a new edition. With her help and guidance, I am hopeful that the pleasures of optimization modeling will be experienced by yet another generation of students.

INTRODUCTIONTOSPREADSHEETMODELSFOR OPTIMIZATION

This is a book about optimization with an emphasis on building models and using spreadsheets Each facet of this theme models, spreadsheets, and optimization has a role in defining the emphasis of our coverage.

A model is a simplified representation of a situation or problem. Models attempt to capture the essential features of a complicated situation so that it can be studied and understood more completely. In the worlds of business, engineering, and science, models aim to improve our understanding of practical situations Models can be built with tangible materials, or words, or mathematical symbols and expressions. A mathematical model is a model that is constructed and also analyzed using mathematics In this book, we focus on mathematical models Moreover, we work with decision models, or models that contain representations of decisions. The term also refers to models that support decision-making activities

A spreadsheet is a row-and-column layout of text, numerical data, and logical information. The spreadsheet version of a model contains the model’s elements, linked together by specific logical information. Electronic spreadsheets, like those built using Microsoft® Office Excel® , have become familiar tools in the business, engineering, and scientific worlds. Spreadsheets are relatively easy to understand, and people often rely on spreadsheets to communicate their analyses. In this book, we focus on the use of spreadsheets to represent and analyze mathematical models

This text is written for an audience that already has some familiarity with Excel. Our coverage assumes a level of facility with Excel comparable to a beginner’s level. Someone who has used other people’s spreadsheets and built simple spreadsheets for some purpose either personal or organizational has probably developed this skill level. Box 1.1 describes the Excel skill level assumed Readers without this level of background are encouraged to first work through some introductory materials, such as the books by McFedries (1) and Walkenbach (2).

BOX1.1ExcelSkillsAssumedasBackgroundforThisBook

Navigating in workbooks, worksheets, and windows

Using the cursor to select cells, rows, columns, and noncontiguous cell ranges

Entering text and data; copying and pasting; filling down or across

Formatting cells (number display, alignment, font, border, and protection)

Editing cells (using the formula bar and cell edit capability [F2])

Entering formulas and using the function wizard

Using relative and absolute addresses

Using range names

Creating charts and graphs

Optimization is the process of finding the best values of the variables for a particular criterion or, in our context, the best decisions for a particular measure of performance. The elements of an optimization problem are a set of decisions, a criterion, and perhaps a set of required conditions, or constraints, that the decisions must satisfy. These elements lend themselves to description in a mathematical model The term optimization sometimes refers specifically to a procedure that is implemented by software. However, in this book, we expand that perspective to include the modelbuilding process as well as the process of finding the best decisions

Not all mathematical models are optimization models. Some models merely describe the logical relationship between inputs and outputs Optimization models are a special kind of model in which the purpose is to find the best value of a particular output measure and the choices that produce it. Optimization problems abound in the real world, and if we ’ re at all ambitious or curious, we often find ourselves seeking solutions to those problems. Business firms are very interested in optimization because making good decisions helps a firm run efficiently, perform profitably, and compete effectively. In this book, we focus on optimization problems expressed in the form of spreadsheet models and solved using a spreadsheet-based approach.

1.1ELEMENTSOFAMODEL

To restate our premise, we are interested in mathematical models. Specifically, we are interested in two forms algebraic and spreadsheet models. In the former, we use algebraic notation to represent elements and relationships, and in the latter, we use spreadsheet entries and structure. For example, in an algebraic statement, we might use the variable x to represent a quantitative decision, and we might use some function f(x) to represent the measure of performance that results from choosing decision x. Then, we might adopt the letter z to represent a criterion for decision making and construct the equation z = f(x) to guide the choice of a decision Algebra is the basic language of analysis largely because it is precise and compact.

As an introductory modeling example, let’s consider the price decision in the scenario of Example 1 1

EXAMPLE1.1 Price,Demand,andProfit

Our firm’s production department has carried out a cost accounting study and found that the unit cost for one of its main products is $40. Meanwhile, the marketing department has estimated the relationship between price and sales volume (the so-called demand curve for the product) as follows:

where y represents quarterly demand and x represents the selling price per unit. We wish to determine a selling price for this product, given the information available.

In Example 1.1, the decision is the unit price, and the consequence of that decision is the level of demand The demand curve in Equation 1 1 expresses the relationship of demand and price in algebraic terms. Another equation expresses the calculation of profit contribution, by multiplying the demand y by the unit profit contribution (x 40) on each item

where z represents our product’s quarterly profit contribution

We can substitute Equation 1 1 into 1 2 if we want to write z algebraically as a function of x alone As a result, we can express the profit contribution as

This step embodies the algebraic principle that simplification is always desirable. Here, simplification reduces the number of variables in the expression for profit contribution. Simplification, however, is not necessarily a virtue when we use a spreadsheet model

Example 1.1 has some important features. First, our model contains three numerical inputs: 40 (the unit cost), 5 (the marginal effect of price on demand), and 800 (the maximum demand). Numerical inputs such as these are called parameters In some models, parameters correspond to raw data, but in many cases, parameters are summaries drawn from a more primitive data set. They may also be estimates made by a knowledgeable party, forecasts derived from statistical analyses, or predictions chosen to reflect a future scenario.

Our model also contains a decision an unknown quantity yet to be determined. In traditional

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algebraic formulations, unknowns are represented as variables. Quantitative representations of decisions are therefore called decision variables The decision variable in our model is the unit price x.

Our model contains the equation that relates demand to price. We can think of this relationship as part of the model’s logic, prescribing a necessary relationship between two variables price and demand. Thus, in our model, the only admissible values of x and y are those that satisfy Equation 1 1

Finally, our model contains a calculation of quarterly profit contribution, which is the performance measure of interest and a quantity that we wish to maximize This output variable measures the consequence of selecting any particular price decision in the model. In optimization models, we are concerned with maximizing or minimizing some measure of performance, expressed as a mathematical function, and we refer to it as the objective function, or simply the objective.

1.2SPREADSHEETMODELS

Algebra is an established language that works well for describing problems, but not always for obtaining solutions. Algebraic solutions tend to occur in formulas, not numbers, but numbers most often represent decisions in the practical world By contrast, spreadsheets represent a practical language one that works very effectively with numbers. Like algebraic models, spreadsheets can be precise and compact, but there are also complications that are unique to spreadsheets For example, there is a difference between form and content in a spreadsheet. Two spreadsheets may look the same in terms of the numbers displayed on a computer screen, but the underlying formulas in corresponding cells could differ. Because the information behind the display can be different even when two spreadsheets have the same on-screen appearance, we can’t always determine the logical content from the form of the display Another complication is the lack of a single, well-accepted way to build a spreadsheet representation of a given model. In an optimization model, we want to represent decision variables, an objective function, and constraints However, that still leaves a lot of flexibility in choosing how to incorporate the logic of a particular model into a spreadsheet. Such flexibility would ordinarily be advantageous if the only use of a spreadsheet were to help individuals solve problems. But spreadsheets are perhaps even more important as vehicles for communication. When we use spreadsheets in that role, flexibility can sometimes lead to confusion and disrupt the intended communication.

We will try to mitigate these complications with some design guidelines. For example, it is helpful to create separate modules in the spreadsheet for decision variables, objective function, and constraints. To the extent that we follow such guidelines, we may lose some flexibility in building a spreadsheet model. Moving the design process toward standardization will, however, make the content of a spreadsheet more understandable from its form, so differences between form and content become less problematic.

With optimization, a spreadsheet model contains the analysis that ultimately provides decision support For this reason, the spreadsheet model should be intelligible to its users, not just to its developer. On some occasions, a spreadsheet might come into routine use in an organization, even when the developer moves on. New analysts may inherit the responsibilities associated with the model, so it is vital that they, too, understand how the spreadsheet works. For that matter, the decision maker may also move on. For the organization to retain the learning that has taken place, successive decision makers must also understand the spreadsheet In yet another scenario, the analyst develops a model for one-time use but then discovers a need to reuse it several months later in a different context In such a situation, it’s important that the analyst understands the original model, lest the passage of time obscure its purpose and logic. In all of these cases, the spreadsheet model fills a significant communications need Thus, it is important to keep the role of communication in mind while developing a spreadsheet.

A spreadsheet version of our pricing model might look like the one in Figure 1.1. This spreadsheet contains a cell (C9) that holds the unit price, a cell (C12) that holds the level of demand, and a cell (C15) that holds the total profit contribution. Actually, cell C12 holds Equation 1.1 in the form of the Excel formula = C4 + C5 * C9 Similarly, cell C15 holds Equation 1 2 with the formula =(C9 C6) * C12. In cell C9, the unit price is initially set to $80. For this choice, demand is 400, and the quarterly profit contribution is $16,000.

Figure 1.1 Spreadsheet model for determining price

In a spreadsheet model, there is usually no premium on being concise, as there is when we use algebra. In fact, when conciseness begins to interfere with a model’s transparency, it becomes undesirable. Thus, in Figure 1.1, the model retains the demand equation and displays the demand quantity explicitly; we have not tried to incorporate Equation 1.3. This form allows a user to see how price influences profit contribution through demand because all of these quantities are explicit Furthermore, it is straightforward to trace the connection between the three input parameters and the calculation of profit contribution

To summarize, our model consists of three parameters and a decision variable, together with some intermediate calculations, all leading to an objective function that we want to maximize. In algebraic terms, the model consists of Equations 1 1 and 1 2, with the prescription that we want to maximize Equation 1.2. In spreadsheet terms, the model consists of the spreadsheet in Figure 1.1, with the prescription that we want to maximize the value in cell C15

The spreadsheet is organized into four modules: inputs, decision, calculation, and outcome, separating different kinds of information In spreadsheet models, it is a good idea to separate input data from decisions and decisions from outcome measures. Intermediate calculations that do not lead directly to the outcome measure should also be kept separate

In the spreadsheet model, cell borders and shading draw attention to the decision (cell C9) and the objective (cell C15) as the two most important elements of the optimization model. No matter how complicated a spreadsheet model may become, we want the decisions and the objective to be located easily by someone who looks at the display.

In the spreadsheet of Figure 1 1, the input parameters appear explicitly It would not be difficult to skip the Inputs section entirely and express the demand function in cell C12 with the formula =800 5 * C9 or to express the profit contribution in cell C15 with the formula =(C9 40) * C12 This approach, however, places the numerical parameters in formulas, so a user would not see them at all when looking at the spreadsheet Good practice calls for displaying parameters explicitly in the spreadsheet, as we have done in Figure 1.1, rather than burying them in formulas.

The basic version of our model, shown in Figure 1.1, is ready for optimization. But let’s look at an alternative, shown in Figure 1 2 This version contains the four modules, and the numerical inputs are explicit but placed differently than in Figure 1.1. The main difference is that demand is treated as a decision variable and the demand curve is expressed as an explicit constraint. Specifically, this form of the model treats both price and demand as variables in cells C9:C10, as if the two choices could be made arbitrarily. However, the constraints module describes a relationship between the two variables in the form of Equation 1 1, which can equivalently be expressed as

(1.4)

Figure 1.2 Alternative spreadsheet model for determining price.

We can meet this constraint by forcing cell C13 to equal cell E13, a condition that does not yet hold in Figure 1.2. Cell C13 contains the formula on the left-hand side of Equation 1.4, and cell E13 contains a reference to the parameter 800 The equals sign between them, in cell D13, signifies the nature of the constraint relationship to someone who is looking at the spreadsheet and trying to understand its logic Equation 1 4 collects all the terms involving decision variables on the left-hand side (in cell C13) and places the constant term on the right-hand side (in cell E13). This is a standard form for expressing a constraint in a spreadsheet model The spreadsheet itself displays, but does not actually enforce, this constraint. The enforcement task is left to the optimization software. Once the constraint is met, the corresponding decisions are called feasible

This is a good place to include a reminder about the software that accompanies this book. The software contains important files and programs In terms of files, the book’s website1 contains all of the spreadsheets shown in the figures. Figures 1.1 and 1.2, for example, can be found in the file that contains the spreadsheets for Chapter 1 Those files should be loaded, or else built from scratch, before continuing with the text. As we proceed through the chapters, the reader is welcome to load each file that appears in a figure, for hands-on examination

1.3AHIERARCHYFORANALYSIS

Before we proceed, some background on the development of models in organizations may be useful. Think about the person who builds a model as an analyst, someone who provides support to a decision maker or client. (In some cases, the analyst and the client are the same.) The development, testing, and application of a model constitute support for the decision maker a service to the client The application phase of this process includes some standard stages of model use.

When a model is built as an aid to decision making, the first stage often involves building a prototype, or a series of prototypes, leading to a model that the analyst and the client accept as a usable decision-support tool. That model provides quantitative analysis of a base-case scenario. In Example 1 1, suppose we set a tentative unit price of $80 This price might be called a base case, in the sense that it represents a tentative decision. As we have seen, this price leads to demand of 400 and profit contribution of $16,000.

After establishing a base case, it is usually appropriate to investigate the answers to a number of “what-if” questions We ask, what if we change a numerical input or a decision in the model what impact would that change have? Suppose, for example, that the marginal effect of price on demand (the slope of the demand curve) were 4 instead of 5 What difference would this make? Retracing our algebraic steps, or revising the spreadsheet in Figure 1.1, we can determine that the profit contribution would be $19,200.

Systematic investigations of this kind are called sensitivity analyses They explore how sensitive the results and conclusions are to changes in assumptions. Typically, we start by varying one assumption at a time and tracing the impact. Then, we might try varying two or more assumptions, but such probing can quickly become difficult to follow Therefore, most sensitivity analyses are performed one assumption at a time. Sometimes, it is useful to explore the what-if question in reverse That is, we might ask, for the result to attain a given outcome level, what would the numerical input have to be? For example, starting with the base-case model, we might ask, what unit price would generate a profit contribution of $17,000? We can answer this question algebraically, by setting z = 17,000 in Equation 1.3 and solving for x, or, with the spreadsheet model, we can invoke Excel’s Goal Seek tool to discover that the price would have to be about $86 (Actually, this is one of two prices that would deliver a profit contribution of $17,000.)

Sensitivity analyses are helpful in determining the robustness of the results and any risks that might be present. They can also reveal how to achieve improvement from better choices in decision making However, locating improvements this way is something of a trial-and-error process, which is inefficient. Faster and more reliable ways of locating improvements are available. Moreover, with trial-and-error approaches, we seldom know how far improvements can potentially reach, so a best outcome could exist that we never detect.

From this perspective, optimization can be viewed as a sophisticated form of sensitivity analysis that seeks the best values for the decisions and the best value for the performance measure Optimization takes us beyond mere improvement; we look for the very best outcome in our model, the maximum possible benefit or the minimum possible cost If we have constraints in our model, then

optimization also tells us which of those conditions ultimately limit what we want to accomplish. Optimization can also reveal what we might gain if we can find a way to overcome those constraints and proceed beyond the limitations they impose.

1.4OPTIMIZATIONSOFTWARE

Optimization procedures find the best values of the decision variables in a given model In the case of Excel, the optimization software is known as Solver, which is a standard tool available on the Data ribbon (The generic term solver often refers to optimization software, whether or not it is implemented in a spreadsheet.) Optimization tools have been available on computers for several decades and predate the widespread use of electronic spreadsheets Before spreadsheets became popular, optimization was available as stand-alone software. It relied on an algebraic approach and was often accessible only by technical experts. Decision makers and even their analysts had to rely on those experts to build and solve optimization models. Spreadsheets, if they were used at all, were limited to small examples. Now, however, the spreadsheet allows decision makers to develop their own models, without having to learn specialized software, and to find optimal solutions for those models using Solver. Two trends account for the popularity of spreadsheet optimization. First, familiarity with spreadsheets has become almost ubiquitous, at least in the business world The spreadsheet has come to represent a common language for analysis. Second, the software packages available for spreadsheet-based optimization now include some of the most powerful tools available The spreadsheet platform need not be an impediment to solving practical optimization problems. Spreadsheet-based optimization has several advantages. The spreadsheet allows model inputs to be documented clearly and systematically Moreover, if it is necessary to convert raw data into other forms for the purposes of setting up a model, the required calculations can be performed and documented conveniently in the same spreadsheet, or at least on another sheet in the same workbook. This allows integration between raw data and model data. Without this integration, errors or omissions are more likely, and maintenance becomes more difficult. Another advantage is algorithmic flexibility: The spreadsheet has the ability to call on several different optimization procedures, but the process of preparing the model is mostly the same no matter which procedure is applied Finally, spreadsheet models have a certain amount of intrinsic credibility because spreadsheets are now so widely used for other purposes. Although spreadsheets can contain errors (and often do), there is at least some comfort in knowing that logic and discipline must be applied in the building of a spreadsheet.

Table 1.1 summarizes and compares the advantages of spreadsheet and algebraic software approaches to optimization problems. The main advantage of algebraic approaches is the efficiency with which models can be specified With spreadsheets, the elements of a model are represented explicitly. Thus, if the model requires a hundred variables, then the model builder must designate a hundred cells to hold their respective values Algebraic codes use a different method If a model contains a hundred variables, the code might refer to x(k), with a specification that k may take on values from 1 to 100, but x(k) need not be represented explicitly for each of the hundred values

Table 1.1 Advantages of Spreadsheet and Algebraic Solution Approaches

Spreadsheet Approaches

Several algorithms available in one place

Integration of raw data and model data

Flexibility in layout and design

Ease of communication with nonspecialists

Intrinsic credibility

Algebraic Approaches

Large problem sizes accommodated

Concise model specification

Standardized model description

Enhancements possible for special cases

A second advantage of algebraic approaches is the fact that they can sometimes be tailored to a particular application. For example, the very large crew-scheduling applications used by airlines exhibit a special structure To exploit this structure in the solution procedure, algebraic codes are sometimes enhanced with specialized subroutines that add solution efficiencies when solving a crew-scheduling problem.

A disadvantage of using spreadsheets is that they are not always transparent. As noted earlier, the analyst has a lot of flexibility in the layout and organization of a spreadsheet, but this flexibility, taken too far, may detract from effective communication. In this book, we try to promote better

communication by suggesting standard forms for particular types of models By using some standardization, we make it easier to understand and debug someone else’s model Algebraic codes usually have very detailed specifications for model format, so once we ’ re familiar with the specifications, we should be able to read and understand anyone else’s model

In brief, commercially available algebraic solvers represent an alternative to spreadsheet-based optimization. In this book, our focus on a spreadsheet approach allows the novice to learn basic concepts of mathematical programming, practice building optimization models, obtain solutions readily, and interpret and apply the results of the analysis. All these skills can be developed in the accessible world of spreadsheets. Moreover, these skills provide a solid foundation for using algebraic solvers at some later date, when and if the situation demands it.

1.5USINGSOLVER

Excel’s Solver is an add-in that comes with Excel. An icon for Solver typically appears in the Data ribbon in the Analysis group. If the icon is not visible, it is possible to activate Solver by following the steps given below.

On the File tab, select Options and then Add-ins.

At the bottom of the window, set the drop-down menu to Manage Excel Add-ins. Then click Go

In the Add-ins window, check the box for Solver Add-in and click OK.

Purchasers of this book have the option to download a Windows-based software package called Analytic Solver Platform for Education (ASPE). ASPE was developed by the same team that created Excel’s Solver, and it will accommodate all models built with Excel’s Solver. However, ASPE is a more powerful version of Excel’s Solver and relies on a different user interface More information on ASPE can be found in Appendix 1.

In order to illustrate the use of Solver, we return to Example 1.1. The optimization problem is to find a unit price that maximizes quarterly profit contribution An algebraic statement of the problem is as follows:

This form of the model corresponds to Figure 1.2, which contains two decision variables (x and y, or price and demand) and one constraint on the decision variables The spreadsheet model in Figure 1.2 is ready for optimization.

To start, we click on the Solver icon in the Data ribbon. This step opens the Solver Parameters window, shown in Figure 1.3. (The location of the cursor is reflected in the first data-entry window.) The Solver Parameters window allows us to specify our model in a way that’s consistent with the following sentence:

Figure 1.3 Solver Parameters window

Set objective C16 to a max[imum] by changing variable cells C9:C10 subject to the constraint C13 = E13

Three data-entry windows in Figure 1 3 allow us to make the specification In the Set Objective window, we point to C16 or enter C16, the address of the objective function; and on the next line, we select the button for Max (or confirm that it is already selected as the default) In the Changing Variable Cells window, we point to the two-cell range C9:C10. Then, to specify the constraint, we click the Add button, which opens the Add Constraint window Figure 1 4 shows this window as it looks when properly filled out, with the drop-down menu in the center to specify that the constraint is an equation

Figure 1.4 Add Constraint window.

In nearly all of the models we will encounter, negative values of the decision variables make no practical sense, so we typically want to require variables to be nonnegative The simplest way to impose this requirement is to check the box for making unconstrained variables nonnegative. (The reference to “unconstrained” variables allows us to impose more stringent constraints if we wish In our example, we might require the unit price to be at least 40 to ensure that profits will not be negative With such a constraint elsewhere in the model, it would be unnecessary to impose a nonnegative requirement on cell C9.)

When specifying constraints, one of our design guidelines for Solver models is to reference a cell containing a formula in the Cell Reference box and to reference a cell containing a number in the Constraint box. The use of cell references keeps the key parameters visible on the spreadsheet, rather than in the less accessible windows of Solver’s interface The principle at work here is to communicate as much as possible about the model using the spreadsheet itself. Ideally, another person would not have to examine the Solver Parameters window to understand the model. (Although Solver permits us to enter numerical values directly into the Constraint box, this form is less effective for communication and complicates sensitivity analysis. It would be reasonable only in special cases where the model structure is obvious from the spreadsheet and where we expect to perform no sensitivity analyses for the corresponding parameter.)

Finally, we specify a solving method for the optimization. In this case, the default choice (GRG Nonlinear) is appropriate, so nothing else is needed The specification is complete, and pressing Solve invokes the optimization procedure. (Alternatively, pressing Close saves the specification on the spreadsheet but does not run the optimization procedure.)

In summary, our model specification is the following:

Objective:C16 (maximize)

Variables:C9:C10

Constraint: C13 = E13

When we invoke the GRG Nonlinear procedure, Solver searches for the optimal price and ultimately places it in cell C9, as shown in Figure 1 5

1.5 Optimal solution produced by Solver

The result of the optimization run is summarized in the Solver Results window, shown in Figure 1.6, which opens when the optimization run completes. The message at the top of the window states, “Solver found a solution All Constraints and optimality conditions are satisfied ” This optimality message, which is elaborated at the bottom of the window, tells us that no problems arose during the optimization and Solver was able to find an optimal solution The profit-maximizing unit price is $100, yielding an optimal profit of $18,000. No other price can achieve more than this level. Thus, if we are confident that the demand curve continues to hold, the profit-maximizing decision would be to set the unit price at $100.

Figure

Figure 1.6 Solver Results window

Finally, the Solver Results window allows us to select a button to preserve the solution on the spreadsheet (as in Fig. 1.5) or to restore the values that were in the spreadsheet before the optimization run

We have used Example 1 1 to introduce Solver and its user interface This interface offers us several options that are not a concern in this problem. In later chapters, we cover many of these settings and discuss when they become relevant We also discuss the variations that can occur in optimization runs. For example, depending on the initial values of the decision variables, the nonlinear solver may generate the following message: “Solver has converged to the current solution All constraints are satisfied.” This convergence message indicates that Solver has not been able to confirm optimality Usually, this condition occurs because of numerical issues in the solution algorithm, and the resolution is to rerun Solver from the point where convergence occurred. Normally, one or two iterations are sufficient to produce the optimality message. We discuss Solver’s result messages in more detail later.

Using Solver, we can minimize an objective function instead of maximizing it We simply select the button for Min rather than Max. (A third option allows us to specify a target value and find a set of variables that achieves the target value This is not an optimization tool, and we will not pursue this particular capability.)

When an optimization model contains several decision variables, we can enter them one at a time, separated by commas More conveniently, we can arrange the spreadsheet so that all the variables appear in adjacent cells, as in Figure 1.2, and reference their cell range with just one entry in the Solver Parameters window. Because most optimization problems have several decision variables, we save time by placing them in adjacent cells. This layout also makes the information in the Solver Parameters window easier to interpret when someone else is trying to audit our work or if we are reviewing it after not having seen it for a long time However, exceptions to this design guideline sometimes occur. Certain applications sometimes lead us to use nonadjacent locations for convenience in laying out the decision variable cells (Box 1 2)

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“Twenty minutes to twelve,” said Sandy, at the end of what seemed like an eternity.

Toma continued his pacing back and forth. Dick sat huddled in his chair. The priest rambled on.

“Ten minutes to twelve,” Sandy informed them.

Dick could endure the suspense no longer. He rose, crossed the room, and flung open the door. A cold draft of air whirled in across the floor. Toma hurried over to where Dick stood and peered over his shoulder. They heard a shout. It brought Sandy and Father Michaud to their feet. Villagers were running in the street. A crowd had gathered.

“They—they’ve come back,” blurted Dick, darting through the door, Toma right behind him. They joined the throng.

In the center of the crowd stood, not Dr. Brady and Father Bleriot, but and Dick’s heart sank at the sight of him—their captive of the night before. In his hand he waved something—something white. With Toma acting as his interference, and employing football tactics, Dick plunged through, gaining a place by the side of the messenger. He seized the piece of birch bark and scanned it eagerly. It was covered thickly with Indian signs and symbols.

“Toma,” cried Dick, “can you make this out? Tell me, what does it say here?”

Toma took the birch bark in his own trembling hands, studied it for a moment, then in a fit of anger threw it at his feet, where with one foot he trampled it in the snow.

“What does it say?” Dick’s voice was shrill, plaintive.

“It say,” stormed Toma, “that you tell ’em big lie about mounted police; that Corporal Rand no come here at all. They make you big laugh.”

At that instant Dick bethought him of the messenger. Defy him, would they? Well, he’d see about that. At least, he’d seize their messenger. He sprang forward with this purpose in view, but the Indian slipped under his arm, dodged behind the tall figure of one of the gaping natives, and before anyone could prevent it, had made his escape. At that moment, Sandy came plowing through the ranks of the spectators, shouting hoarsely.

“Where is Dr. Brady?”

“He didn’t come back.”

“What’s all this rumpus about then?”

“That Indian prisoner I released last night came back with a defiant message, which says that they, the Indians, don’t believe that the policeman is here.”

“And the messenger?”

“He slipped away from me.”

Dick ordered the crowd back with an authoritative wave of his arm. His feeling of hopelessness and despair had given place to anger, to a consuming, burning rage. The Indians had defied him openly. They were making a fool out of him. They had called his bluff.

It occurred to him that he could recruit another attacking party and go to the doctor’s rescue. But the

memory of his experience of the night before still rankled in his mind. No—if he were to accomplish anything, it would be through his own efforts, and with the assistance of only Sandy and Toma. He beckoned to his chums.

“Let’s go back to the billet,” he suggested, “and talk this thing over.”

As his two friends came up, he linked his arms in theirs and began:

“I can see now, Sandy, that I have made a terrible mistake. I’ve got myself in a hole and may never be able to get out of it. Just the same, I don’t intend to give up. I’m not licked yet. I want to know if you boys will stand behind me.”

“Yes, Dick, we’re with you,” Sandy assured him.

“You depend on us,” added Toma.

Back in the billet again, they commenced to lay their plans. On the previous night they had tried, by the superiority of their numbers, to intimidate the enemy. They had failed. Now they would employ stealth. That night, they decided, the three of them would creep up to the Indian village and attempt a rescue.

“We may be successful,” said Sandy. “We have a chance, at any rate.”

“Our last chance, too,” declared Dick. “If we fail in this, it is all over.”

A little later, Sandy went over to the mission store to purchase a few supplies. Toma remained behind, his

head bowed deep in thought. Silence had come to the room, broken only by the breathing of the boys and the crackling of the logs in the fireplace. After a time, Dick rose.

“I suppose we’d better be thinking about lunch.”

Of a sudden, Toma darted to his feet. He had sprung from his chair so quickly, that Dick, who was looking at him, could scarcely follow the lightning movement. Toma hugged himself in ecstacy. He seized Dick in a smothering embrace, whirling him around and around.

“Dick, listen me,” he shouted. “I know what we do now. I think it all out. It come to me in flash. Sandy no need go at all. Jus’ you, me go. We go this afternoon. Hurry— you follow me quick!”

Blindly Dick followed the other. He trotted down the street in the wake of his excited chum, wondering what it was all about. They hurried past the mission school, reaching, finally, a low dwelling, into which, without a moment’s hesitation, without even the preliminary of a knock, Toma darted.

It was the house which harbored Corporal Rand. Upon the afternoon of their arrival, the policeman had been placed here with an Indian woman in attendance. He was here now, sitting propped up in a chair in front of a pleasant fire.

“Good morning, corporal,” both boys greeted him. The policeman turned his head. As he did so, the boys stopped abruptly. A remarkable change had taken place in him. His cheeks were fuller now. His eyes burned less

brightly. The heavy beard-growth had been removed. He smiled a wan greeting.

“Dick and Toma, as I live! Where did you come from?”

“We have a billet down the street,” answered Dick.

“Ah, yes; and I have been ill. Very ill. I can remember— it is so difficult to remember—but I was on the trail, wasn’t I? A difficult trail. And what is the name of this place, Dick?”

“Keechewan.”

“Keechewan! Keechewan!” Corporal Rand repeated the name. “It sounds familiar, doesn’t it?”

Toma was beside him now—standing very close, looking down into the sick man’s eyes. He suddenly stooped and whispered something into Rand’s willing ears, then drew back smiling.

“It is all right,” he announced to Dick, who had come closer. “Corporal Rand he say all right. Him willing we go. We must hurry very fast, Dick. You go back to billet an’ pretty soon I go there too.”

And almost before he realized it, Toma had seized his arm and was dragging him toward the door.

“Quick!” he commanded. “You go back to billet. I know place where I find two horses. You get us something to eat in plenty hurry. Two rifles, cartridge belts, revolvers ——You work quick—plenty fast. So me too.”

“But Toma,” protested his bewildered companion, “I don’t see. I don’t know What——”

“No time ask ’em questions now. Do like I say. Quick! Hurry!”

Through the open doorway Dick was bundled, pushed, treated somewhat roughly, considering that Toma was his friend. Outside in the chill air, he had started to protest again, but the door was slammed in his face.

“You be good fellow. Hurry now!” the inexorable voice boomed at him through the heavy barrier. “I be along mebbe eight, ten minutes.”

There was nothing left for him to do except obey. Shaking his head, wondering what new form of insanity had seized hold of his friend, he wheeled about and struck back towards the billet. There he gathered up a bundle of food, secured the rifles, cartridges and revolver—exactly as he had been instructed—and sat down to wait.

In a remarkably short time Toma appeared. His coming was heralded by the clatter of hooves. Dick heard a voice calling to him.

Toma did not even dismount, as Dick thrust his head through the doorway.

“Is that my horse?” asked Dick, feeling a little foolish.

“Your horse. Bring ’em rifles an’ grub an’ jump up into saddle quick.”

Sandy was just coming down the street, his arms loaded with provisions, when the two horses, their flanks quivering, nostrils dilated, leaped from the trodden snow around the doorway and galloped away like mad.

They turned off on the north trail, whirling past an open-mouthed sentry, who, in his hurry to get out of the way, stepped back in a huge snowdrift and sat down. They streaked over a narrow bridge, spanning a creek, shot up the steep embankment on the farther side and, at break-neck speed, headed for the open country in the direction of the Indian village. It was not until they were two miles out, that Toma drew in his horse.

“We stop here for a few minutes,” he informed Dick. “What for?”

Toma produced a bulky package, deftly opened and shook out—a frayed crimson tunic of the mounted police.

“What’s that for?” Dick gasped.

“You put ’em on—quick! You Corporal Rand now. Indians be much afraid when we ride up.”

Trembling, Dick removed his own coat and put on the crimson garment. They rode on again.

It was all that Dick could do to sit erect in his saddle, much less simulate a quiet determination, a bravery he did not feel. The two miles dwindled into one. The remaining mile to the village—how quickly did it seem to slip away past them, bringing them closer and closer to that unwavering row of brown tepees.

Their horses went forward at a walk. From the tiny dwellings emerged human figures. Malevolent eyes were watching them. Dick caught the flash of sunlight on some bright object, probably a rifle barrel, and he

grew rigid in the saddle, instinctively reaching toward the holster at his side. Toma detected the motion and soberly shook his head.

“No do that,” he advised promptly. “Mounted police never pull gun ’til other fellow get ready to use his. What you say we make horses go fast? Gallop right up to village.”

Dick approved the suggestion. For one thing, a flying mark is more difficult to hit. Another thing, it gave a touch of realism to their bluff. It was exactly what a mounted policeman would do.

So, when less than fifty yards from the nearest tepee, they dug their heels into their ponies’ flanks and cantered briskly up. They approached the first two tepees and passed them without mishap. But Dick’s heart was in his throat now. His cheeks were drained of color. With increasing difficulty, he kept his place astride his plunging horse.

Indians were pouring out of their domiciles, like disturbed bees from a hive. A low murmur came to the boys’ ears. Form after form they flashed by, scarcely conscious of where they were going until, by chance, they perceived that toward the center of the encampment there had gathered an excited crowd of natives, who were watching their approach. Toward this crowd, they made their way at a quick gallop.

Dick felt a little dazed as they came to a sudden halt. The Indians had fallen back, yet did not disperse. Deep silence greeted them. It was so deeply and intensely quiet that Dick could almost believe that the Indians were statues of stone.

He tried to speak, but his tongue clove in his mouth. Fear had settled upon him and he seemed powerless to shake it off. At the crucial moment, when everything depended upon his actions and deportment, he was failing miserably. Fortunately, he had the good sense to see this and tried desperately to control himself. He sat up more rigidly in the saddle, his mittened hands clenched.

“Make ’em talk,” whispered Toma.

Dick flung up one arm in a commanding gesture.

“Bring the two white men here at once,” he ordered.

Then suddenly his gaze seemed to waver. The crowd became a blur—a shadowy something before his eyes. In their place rose up the stern figure of Inspector Cameron—the worn, austere face, the steel-gray eyes, the decisive chin. Again Dick threw up his arm. A strange calmness pervaded him.

“Bring them here,” he repeated in a voice of gathering impatience.

A murmur rose from the crowd. Suddenly it fell back, hesitated for a brief interval, then hurried away to do the white chief’s bidding. The tension had relaxed. As he slowly turned in his saddle to meet the gaze of his friend, a ray of sunlight fell across Toma’s face.

“Bye-’n’-bye they come!” he cried happily.

CHAPTER XXIII

BACK AT THE MISSION

“You’ve won, Dick. Dr. Brady says that you were absolutely wonderful. The way you sat on your horse, the way you ordered that crowd of natives about—your calmness, your courage. You were every inch a policeman!”

Dick laughed.

“I wonder what Dr. Brady would say if he knew the truth. I wonder what he would say if he knew that I was quaking inside like a jelly-fish. It is true that I sat on my horse, but the credit is due the horse, not me. If he had moved as much as one front leg, he’d have shaken me out of the saddle. Our cause would have been lost.”

“Come! Come! You’re fooling, Dick.”

“Not at all. I was never more frightened in my life, and I never want to be as badly frightened again. I was trembling like a leaf. When the chief brought out Father Bleriot and Dr. Brady and turned them over to us, I very nearly collapsed.”

“But the Indians were frightened too. They were afraid of you.”

“Perhaps they were. Everyone was more or less frightened, I guess, except Toma. Cool! Honestly I think he enjoyed it. He egged me on, encouraged me. I never would have had the nerve to enter that village if it hadn’t been for him. There’s a young man, Sandy, who was born without fear. He doesn’t know what it means.”

Sandy rose and threw another log on the fire. Then he rubbed the palms of his hands together and grinned.

“Well, I’ll grant that. He doesn’t. He loves action and excitement. He eats it. I suppose he’s off somewhere now, worrying because we haven’t much left here to do.”

“I know where he is,” laughed Dick. “He went back to the Indian village with Dr. Brady. Brady is finishing his work there this afternoon. Toma is his interpreter.”

A moment of silence. Then:

“Dick, were you over to see Corporal Rand this morning?”

“Yes.”

“Better, isn’t he?”

“Much better. I never saw anyone improve so rapidly.”

“But you didn’t talk with Dr. Brady. Did he tell you, Dick —did you hear——”

In his excitement, Sandy pulled forward a chair and plumped himself into it, putting both hands on Dick’s knees.

“Dr. Brady admits that he was wrong. His first examination was—er—well, a little hasty. Those feet, for example. Bad, of course, but——”

“Do you mean to tell me he’ll walk?”

“Exactly.”

“Will be well enough to return to his duties?”

“Dr. Brady believes so now. He was quite enthusiastic this morning. It’ll take months, of course—months before he’ll be around again. First, he must go to Edmonton and have an operation—skin grafting and all that sort of thing.”

“And his mind is all right too?”

“Yes. Almost.”

“Almost!” snorted Dick. “You don’t mean that, surely. Why, he was perfectly rational last night, when I had a talk with him. He remembered everything. He told me about his troubles on the trail. He asked me if we were intending to take the Keechewan mail back with us. We had a long talk together. His mind is as bright as a new silver American dollar. What made you say that?”

Sandy rose again and pushed back his chair. He walked over and stood with his back to the fire.

“It’s getting colder, Dick.”

“Look here, you gay young deceiver, you didn’t answer my question.”

Sandy looked up blankly.

“Eh, what? Question?”

“Yes. My question. Why do you think that Corporal Rand hasn’t fully recovered his mental powers?”

“He hasn’t—quite,” Sandy wagged his head dolefully. “He sometimes suffers from hallucinations. Dr. Brady and I both noticed it.”

“What are they?”

“There was one in particular. It would have amused me, only I feel so sorry for him. He’s—he’s—well, he thinks he’s going to be placed under arrest. Can you imagine anything so absurd? And by Inspector Cameron, too. He’s really worrying about it.”

Dick’s roar of laughter echoed to every part of the room. Tears of merriment chased each other down his cheeks.

“I don’t think that is so very funny,” Sandy declared with great dignity. “You ought to pity the man.”

“You chump! You chump!” howled Dick. “Why that—that isn’t an hallucination; it’s a fact. Corporal Rand may be arrested. He probably will be, but I don’t believe Cameron will be very severe with him. Not this time.”

“What’s he done?” blinked Sandy.

“Disobeyed orders. He came up here against the inspector’s wishes. You see, Cameron intended to come himself.”

“Oh,” said Sandy, much relieved, “the inspector has probably forgotten all about it.”

“Not he! Cameron never forgets.”

“But he won’t be hard on him.”

“Of course not. He’ll impose a light fine along with a severe lecture. Then he’ll reach in his pocket and give Rand the money to pay the fine.”

Sandy laughed.

“Why don’t you tell Rand that? I think it will relieve his mind.”

“Guess I will.” Dick rose. “I’ll take a run over there now and cheer him up.”

Dick had readied the door, when Sandy called him back.

“I say, Dick.”

“Yes, Sandy, what is it?”

“Remember the night when you released the Indian— sent him back to his people with that message?”

“Yes, I remember.”

“I—I called you some names, Dick. I’m sorry about that. I guess I was a bit angry and overbearing. You’ll overlook it, won’t you?”

Dick took his chum’s hand and gripped it firmly.

“Why—I’d forgotten about it. Anyway, it’s all right. Everything is all right,” he smiled.

“And you’re all right, too,” declared Sandy.

Which, considering everything, was as fine a compliment as Dick had ever received.

CHAPTER XXIV A TREK HOMEWARD

A dog train waited outside the Keechewan Mission. It was a long train—ten teams of malemutes and huskies —an impatient train, too, for not only the dogs but the drivers as well, waited impatiently for the word of command that would set it in motion. Brake-boards were passed firmly into the snow, the feet holding them in place becoming cramped as the moments passed and still the leader did not appear.

Presently a door creaked open and a tall young man, laden with two heavy mail sacks, emerged to the street. It was Dick Kent and he was smiling. Behind Dick came Dr. Brady and the cassocked figure of a Catholic priest, Father Bleriot. The two last named persons walked sideby-side, talking and laughing. The priest’s right arm was thrust in friendly fashion through that of the physician’s, and, as the three figures came to a halt directly opposite the sledge, to which a team of beautiful gray malemutes were harnessed, the doctor declared:

“So we’re to go back at last. I see you have everything ready, Dick. Nothing to do now except pull our worthless freight out of here.”

“Monsieur does himself an injustice,” beamed the priest. “You have reason to feel proud—you and your friends. Hope and happiness and tranquility have come again to Keechewan.”

“Have you any message that I can take to Inspector Cameron?” Dick asked.

“It is there in the sack,” Father Bleriot pointed to one of the mail pouches Dick had placed in the empty sleigh. “A letter, monsieur, written from my heart and sealed with tears of thankfulness. All one night I sat and wrote that letter, page after page, to the good inspector, and when I had finished, monsieur, I found that I had expressed not even one small part of what I wished to say.”

“Cameron will understand,” Dr. Brady reassured him.

“And now you go,” said the priest regretfully. “You embark upon a difficult journey. You go south without even a pause to rest.”

“It will not seem so far this time,” stated Dick, turning toward his sledge. “Well, thank you Father, for your kindness and hospitality. We must go now. Dr. Brady, you’ve worked hard, so we’re giving you the place of honor here with the mail.”

They shook hands again. Dr. Brady was bundled into the sleigh. At a signal from Dick, impatient feet were lifted from brake-boards, whips cracked, and the train whirled away amid a flurry of fine snow. Father Bleriot, a somewhat lonely figure, stood and waved his farewell, his expressive dark eyes lighting with satisfaction, as there came to him the cheers of scores of happy

householders, who lined the streets to watch the party go by.

Speeding southward, the dog train soon left the village behind. The bleak landscape of the Barrens settled around them. Rolling drifts of crusted snow stretched away to the horizon. The wind shrieked up from behind, a cold wind which froze the hot breath of the huskies, and painted their lean, gray flanks with a white coat of frost.

Hour after hour, then day after day, the cavalcade bore on. The Barrens vanished. A streak of dun-colored forest slowly advanced and silently enwrapped them. The forest led them to a chain of hills. The hills carried them begrudgingly to a valley. The valley flung them into a meadow, which, in turn, by various stages, brought them to another forest, another valley, across lakes, down ravines, over rivers, on and on and on, until at last, when they had almost begun to believe that the trail would never end, weary yet exuberant, they drove into the compound at Fort Mackenzie.

There followed a scene which to Dick at least seemed somewhat confused and vague. He remembered helping to carry Corporal Rand into the barracks. He recalled a good deal of shouting and laughing. A throng pressed forward, sledges were unloaded, drivers darted here and there. Sandy and Toma joined Dick, and they were standing there, talking excitedly, when a crimson-coated figure pushed his way through the crowd and approached them.

“Welcome back,” Constable Whitehall shouted. “Glad to see you all home again. The inspector is waiting for you.”

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