Lesson 2+3

Question 1

Sensitivity Analysis

Answer 1

assesses sensitivity of optimal solutions to changes in numeric constants, because of uncertainty, estimation errors or human intervention

Question 2

Final Value

Answer 2

Optimal value for each decision variable

Question 3

Reduced Cost

Answer 3

the amount by which the objective coefficient must be reduced in order for the
variable to be usable in the model (more than this amount to make it attractive) Reduced cost is always 0 if the variable is used (and vice versa)

Question 4

Allowable increase and decrease

Answer 4

the range
within which the final value of the variable will not be affected

Question 5

Shadow price

Answer 5

the amount by which the objective function value would change if the constraint
R.H.S. is increased by 1 (A shadow price of 0 indicates that the constraint is redundant/non-binding (and vice versa))