IME301-W10 - Sensitivity Analysis Notes

IME301-W10 - Sensitivity Analysis Notes - the constraint...

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d of shadow price in the textbook and on wiki-pedia. 2 + 13x3 , NOT g, h, i es by hand and use computer for sensitivity analysis. 03/02/10 IME301 – Lab Notes Lindsey Chun Sensitivity Analysis **Sensitivity analysis shows how much flexibility you have with the constraints/data.** The coefficients of the objective function and the constraint RHS are not fixed values in LP problems. **You will only purchase more raw material if the profit from the purchase is higher than the marginal cost of the raw material (the cost of one more unit than the calculated optimal number of units). Adjusting the coefficients of the OF changes the slope of the OF line and therefore changes the optimal solution. Binding constraints : limit production o How much are you willing to pay for the marginal increase of that unit? The shadow price is the price you would be willing to pay for one more unit of the RHS. o Binding constraints on the report are the RHS which have the same final value as
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Unformatted text preview: the constraint RHS. The allowable increase is the highest increase to the final value which will change the coordinates of the optimal solution but not the extreme point. o The constraint RHS will change which will shift the constraint line, and therefore shift the extreme point. o If you go beyond the allowable increase, the optimal solution changes. o If the allowable increase and decrease is small, the solution is very sensitive. Small and large is determined from how many orders of magnitude the allowable increase or decrease is from the final value. If it is 1 difference in magnitude, it is large, but if it is different by 0.001 then the solution is very sensitive because tat difference is small. o You can only change one final value at a time (i.e. 20 to 21.5 and leave the rest constant). Max Z = -5x1 + 5x2 + 13x3 Subject to:-x1 + x2 + 3x3 20 12x1 + 4x2 + 10x3 90 xj >0...
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