3: Linear Programming (Computer Solution and Sensitivity Analysis)

Simplex Method

is a procedure involving a set of mathematical steps to solve linear programming problems

Excel

can be used to solve linear programming problems, although the data input requirements can be more time-consuming and tedious than with a software package like QM for Windows that is specifically designed for the purpose

Excel Spreadsheets

requires that column and row headings for the specific model be set up and that constraint and objective function formulas be input in their entirety

Excel Spreadsheets, QM for Windows

a typical general-purpose quantitative methods software package

Dual

it is the maximum amount the company would pay to get more of the resource

QM for Windows

There are numerous software packages that devoted exclusively to linear and its derivatives, and one of those is ________

Fractional Relationships

_________ between variables in constraints must be eliminated

Marginal Value

is the dollar amount one would be willing to pay for one additional resource unit

QM for Windows

provides solution results in several different formats, including a graphical solution

Sensitivity Analysis

is the analysis of the effect of parameter changes on the optimal solution.

Objective of Sensitivity Analysis

is to determine the range of values for a specific objective function coefficient over which the optimal solution point, X1 and X2 will remain optimal

Sensitivity Range

for an objective coefficient is the range of values over which the current optimal solution point will remain optimal.

Sensitivity Range

The focus of sensitivity analysis is to determine those two values

Sensitivity Range For A Right-Hand-Side Value

is the range of values over which the quantity values can change without changing the solution variable mix, including slack variables.

Other Forms of Sensitivity Analysis

include changing constraint parameter values, adding new constraints, and adding new variables

Sensitivity Range For A Constraint Quantity Value

the range over which the shadow price is valid.