Exam 4: Sensitivity Analysis and the Simplex Method

Given an objective function value of 150 and a shadow price for resource 1 of 5, if 10 more units of resource 1 are added (assuming the allowable increase is greater than 10), what is the impact on the objective function value?

Meaningful Risk Solver Platform (RSP) sensitivity report headings can be defined

What is the value of the objective function if X₁ is set to 0 in the following Limits Report?

The Simplex method uses which of the following values to determine if the objective function value can be improved?

A binding greater than or equal to ( $\ge$ ) constraint in a minimization problem means that

A manager should consider how sensitive the model is to changes in all of the following except

When automatically running multiple optimizations in Risk Solver Platform (RSP), what spreadsheet function indicates which optimization is being run?

The following questions are based on the problem below and accompanying Risk Solver Platform (RSP) sensitivity report. Carlton construction is supplying building materials for a new mall construction project in Kansas. Their contract calls for a total of 250,000 tons of material to be delivered over a three-week period. Carlton's supply depot has access to three modes of transportation: a trucking fleet, railway delivery, and air cargo transport. Their contract calls for 120,000 tons delivered by the end of week one, 80% of the total delivered by the end of week two, and the entire amount delivered by the end of week three. Contracts in place with the transportation companies call for at least 45% of the total delivered be delivered by trucking, at least 40% of the total delivered be delivered by railway, and up to 15% of the total delivered be delivered by air cargo. Unfortunately, competing demands limit the availability of each mode of transportation each of the three weeks to the following levels (all in thousands of tons): The following is the LP model for this logistics problem. -Refer to Exhibit 4.1. The Week 1 by Truck and Week 1 by Rail constraints each have a shadow price of -360. What do these values imply?

All of the following are true about a variable with a negative reduced cost in a maximization problem except

The shadow price of a nonbinding constraint is

If the allowable increase for a constraint is 100 and we add 110 units of the resource what happens to the objective function value?

The absolute value of the shadow price indicates the amount by which the objective function will be