If you are new to modeling, it can be very helpful to watch someone build a model from start to finish. I created a model to decide whether it would be cost-effective to install solar panels on the roof of my house, and while building it, I videoed the entire process. It is a 39 minute video that covers a lot a ground. I show how to get started (i.e., start simple), then demonstrate the early process of identifying variables and relationships, progressive model refinement, estimation, locating key facts using public resources, managing dimensions, exploring what-ifs, creating user-interfaces to the model, evaluating the time-value of money including concepts of net present value, internal rate of return and time to recoup investment, and the analysis of whether it makes since to postpone action. All these with a down-to-earth and real-life personal example.
It is hard to find resources, articles or textbooks that cover the pragmatic skills required to actually build models. This video addresses these areas through example. I hope others can leverage this information to pass along these important skills.
If you are wondering whether it would be cost-effective to install a solar PV system on your own house, then this is a must watch. Not only will you learn a lot about the trade-offs, but you will learn about them in a way that allows you to customize the information to your own situation.
If you are faced with any other complex decision or modeling problem, or you just want to develop your own modeling skills, you will probably gain some insight or skills that will be useful for approaching it.
The Analytica model developed during the video can be downloaded (so you can tailor it yourself) from: Solar Panel Analysis model.ana
The model was created using our free edition of Analytica. If you don’t already have Analytica installed, and you want to try out the model or tailor it to your own situation, simply install the free version.