Question

Using the below sensitivity report, answer the following questions:

SENSITIVITY REPORT ANALYSIS PROBLEM

 

 

a. If this is a LP product mix problem report, how many units of each product should be produced?

b. If one unit of French is force produced, what will happen to the Objective Function value?

c. The Caribbean’s Objective Coefficient is increased to 80. How will the new Objective Function value be determined?

 

d. Which constraints are binding?

e. If Finishing is decreased by one unit, how will the Objective Function value be affected?

Answer 1

a. Refer the variable cells section of the sensitivity report, and Final Value

Number of units of Italian to be produced = 120

Number of units of French to be produced = 0

Number of units of Caribbean to be produced = 400

 

b.

Reduced Cost of French is -4

Therefore, if one unit of French is produced, then the objective function value will decrease by 4

 

c.

Objective coefficient of Caribbean is 78 and its Allowable Increase is 4

So, the upper limit of its optimality range is 78+4 = 82

85 is more than upper limit. Therefore, if optimal solution will change.

And new objective function value will be determined by Solving the problem again

 

d.

Refer Constraints section of the sensitivity report,

Binding constraints are those whose Final Value is equal to Constraint R.H. Side or whose Shadow Price is non-zero .

Binding constraints are: Carpentry and Finishing

 

e.

Shadow price of Finishing is 80.

If Finishing is reduced by one unit, then objective function value will decrease by 80

Shadow price of Finishing is 80.