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overcoming spreadsheet risk in supply chain modeling

Spreadsheet optimization modeling plays an important role in the management of todays sophisticated supply chains. However, despite the advantages of spreadsheets (or in some cases because of these advantages) there are significant risks associated with spreadsheet models. Spreadsheet risk is defined as the chance of adverse operational or financial consequences due to erroneous creation, maintenance, and/or use of spreadsheet models. Such errors arise because the intrinsic complexity of optimization models is beyond the expertise of many non-technical managers.  In this paper we discuss procedures that we developed for managing the substantial risks associated with the use of spreadsheets for supply chain optimization.  The issues we address go far beyond simple data entry mistakes, which are possible in virtually every aspect of business and can never be completely eliminated.