A production possibilities curve in Excel is a way of expressing values of a business production process. Said curve indicates how and what is the potential in terms of the production of a certain article, doing it in relation to a specific period.
This curve of possibilities reflects the frontier of possibilities of production in business processes, with the wonderful tool of Excel it is possible to represent this study in a graphical way, and if you want to learn how to use Excel for this task, read on.
How to make a curve in Excel and plot production possibilities frontier?
When we talk about production processes, we normally refer to articles or products that any company makes, these processes deserve an in-depth study of the production values that are generated in a given period of time, thrown as results.
These results can be reflected in a simple graph of an Excel worksheet, what is needed to execute or make a production possibilities curve is basically to put the data in a certain way inside Excel, working with the appropriate coordinate axes .
In this sense, the first thing we will do is set two variables: one that represents the number of spaces to store the products, and another that reflects the number of products produced in each space.
Likewise then we will start putting those values in the respective axes, assigning columns and rows with specifications for it, in a perpendicular way to establish the parameters in these axes.
Then select by moving the cursor in all the cells involved in the axes, and now you must insert the graph; to do this, choose the ‘Insert’ option, and then ‘Graphics’, and then you will click on the scatter tool, and choose the ‘Scatter with smooth lines and markers’ option; automatically, the worksheet will insert the graph with the curve.
What is this production possibilities curve made in Excel for?
The production possibilities curve in Excel, as stated at the beginning, is the reflection of the production possibilities frontier of a company. For this knowledge, a database with the production numbers of a company is necessary.
The organization of these numbers through coordinate axes is the process that is done in Excel with the elaboration of said curve of possibilities, this being a simple process to apply in this Microsoft software, for the subsequent explanation of the results obtained. .
This curve is very useful, since it is a well-studied process and systematized by the spreadsheet, which is needed in a detailed study. In fact, making this type of curve is an equivalent of making an advanced line chart of Excel lines, which reflects the importance of making a production possibilities curve in Excel.
The frontier of production possibilities made in Excel allows administrators and executives of a company to have knowledge about the production process, and from there draw conclusions based on whether the process is optimized, or if it lacks more investment.
What are the implications of making a production possibilities curve in Excel?
Due to the fact that this curve of possibilities is a way of interpreting business production processes, there are certain implications in its elaboration and analysis.
When making this curve in Excel, knowledge is needed that implies the use of Excel formulas, so that the graph is optimized.
For its part, after having elaborated this curve of possibilities, which in Excel is taken as some known data points, its analysis is the purpose of the entire procedure, therefore, the vast knowledge of the production process is get involved.
All this must be taken into account to make a curve of production possibilities in Excel, and that the process is optimized and reflects what we need to see. As an aesthetic recommendation, it is good to color the cells in Excel, so that the discussion and study of the curve is more didactic.
