Operations Research : Applications and Algorithms
Operations Research : Applications and Algorithms
4th Edition
ISBN: 9780534380588
Author: Wayne L. Winston
Publisher: Brooks Cole
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Chapter 5.2, Problem 2P

a.

Explanation of Solution

Optimum solution

  • In this case the reduced cost for x1  is 0.
  • The allowable increase for x1 is 20.
  • Hence the basic variables remains the same

b.

Explanation of Solution

Shadow price

  • The Relevant Shadow Price is ‑$20.
  • If demand is decreased by up to 3 cars then the current basis remains optimal.
  • So Dual Price may be used to compute new z‑value.

    New Profit = $32,540 + (2) (20) = $33,580

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Operations Research : Applications and Algorithms
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ISBN:9780534380588
Author:Wayne L. Winston
Publisher:Brooks Cole