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Unformatted text preview: Sensitivity Analysis in Linear Optimization Step 1 Does more than one parameter change? Yes Then we cannot use the sensitivity report to conclude and need to resolve the problem on the computer to get an answer. No If the one parameter change is in the right-hand side (rhs) of a constraint (for instance, a change in available capacity), go to Step 2. If the one parameter change is in an objective coefficient, go to Step 3. Step 2 (For a change in the rhs of a constraint.) Convert the proposed change in the units you used to solve the problem on the computer. Then: (a) Is the proposed change within the allowable range? Yes Go to (b). No We cannot say exactly how the change will affect the optimal profit and need to resolve. 1 (b) Because the proposed change is within the allowable range, we can say exactly how the change will affect the optimal profit. (This is because the system of equations we have to solve to find the optimal solution doesn’t change, except for one rhs coefficient.) The change in optimal profit is given by: (Shadow Price) × (Change in rhs) Note: If the proposed change is about an increase in the rhs of a capacity constraint...
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- Spring '08