When faced with a modelling project, there is often an overwhelming temptation to “dive in” to the model building activities. This temptation can be reinforced by the ease of creating some first results very quickly when using Excel. In addition, the flexibility of Excel may lead one to assume that any adjustments that may later be required could be implemented without significant difficulty.
In fact, although it is of course not necessary to plan every aspect and formula in detail prior to building the model, there are some fundamental issues relating to context and structure that should be considered carefully. If this is not done, then there is a likelihood risk that the resultant model will be far less effective and efficient than it could or should be.
Clearly, some important principles for any model should include that:
The key contextual issues to consider relate to:
These issues are discussed in the following sections of this chapter.
In the following chapter, we discuss further issues that more specifically to the design of the model in detail. These include: