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Sensitivity Analysis of Linear Programming

This document discusses sensitivity analysis of linear programming problems. It introduces sensitivity analysis and explains how it can be used to determine how changes to objective function coefficients and right-hand side values of constraints impact the optimal solution. It provides examples of using graphical and Excel solver methods to analyze how changes within the allowable range, determined by shadow prices, do not change the optimal solution, while changes outside this range do change it.

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Rj Malayao
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© © All Rights Reserved
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Download as PPTX, PDF, TXT or read online on Scribd
205 views

Sensitivity Analysis of Linear Programming

This document discusses sensitivity analysis of linear programming problems. It introduces sensitivity analysis and explains how it can be used to determine how changes to objective function coefficients and right-hand side values of constraints impact the optimal solution. It provides examples of using graphical and Excel solver methods to analyze how changes within the allowable range, determined by shadow prices, do not change the optimal solution, while changes outside this range do change it.

Uploaded by

Rj Malayao
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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SENSITIVITY

ANALYSIS OF
LINEAR
PROGRAMMING
NANCY S. EVANGELISTA
OUTLINE

• INTRODUCTION TO SENSITIVITY ANALYSIS


• GRAPHICAL SENSITIVITY ANALYSIS
-Objective Functions Coefficient
-Right Hand Sides
INTRODUCTION
• Sensitivity analysis is important to decision makers because
real-world problems exist in a changing environment.
• Sensitivity analysis provides us with the information
needed to respond to such changes without requiring
the complete solution of a revised linear program.
SENSITIVITY ANAYSIS
• Sensitivity analysis is the study of how the changes
in the coefficients of an optimization model affect
the optimal solution.
• Using sensitivity analysis, we can answer questions
such as the following:
SENSITIVITY ANAYSIS
1. How will a change in a coefficient of the
objective function affect the optimal solution?
2. How will a change in the right-hand-side
value for a constraint affect the optimal
solution?
SENSITIVITY ANAYSIS

• It deals with the impact of changes


made to the model---new solution.
What are these changes?
1. Changes to the RHS of Constraints
-if it is a binding constraint, the X,Y will change
values and Z will change
-if not binding constraint, X,Y might change if it
will become a binding constraints
What are these changes?
2. Change to the Coefficient of the Objective Function
-slope of the objective changes
-Z will probably change unless not producing that
product
-value of X, Y may change if the coefficient was
changed enough to make it so
What are these changes?
3. Changes to coefficient within the constraints
-slope of constraints changes
-will probably have a new Z values and new X, Y
values if it was a binding constraint
LINEAR PROGRAMMING
FORMULATION
• Decision Variables
• Objective Function
• Constraints
• Non-negativity restrictions
SAMPLE PROBLEM:
• The Margan Furniture makes two products: tables and chairs,
which must be processed through assembly and finishing
department. Assembly department is available for 60 hours in
every production period, while the finishing department is
available for 48 hours of work. Manufacturing one table requires
4 hours in the assembly and 2 hours in the finishing. Each
chairs requires 2 hours in the assembly and 4 hours in the
finishing. One table contributes P 180 to profit, while a chair
contributes P 100. The problem is to determine the number of
tables and chairs to make per production period in order to
maximize the profit.
LINEAR PROGRAMMING
FUNCTION
• Let X=tables, Y=chairs Z=profit
• Maximize Profit: Z= 180X + 100Y
4X + 2Y ≤ 60
2X + 4Y ≤ 48
• X,Y ≥ 0
GRAPH
CHANGES TO OBJECTIVE
FUNCTION
• Range of Optimality- the interval associated with each
coefficient such that the optimal point remain unchanged
• To find: Objective Function Z= C1X + C2Y,
slope is -C1/C2
THREE STEPS
1. Find slope of 2 constraints defining optimal point (A
and B)
2. A ≤ -C1/C2 ≤ B
Set C2 equals to its original value and solve for C1
3. Set C1 equals to its original value and solve for C2
CHANGES TO OBJECTIVE
FUNCTION
• Maximize Profit: Z= 180X + 100Y
4X + 2Y ≤ 60
2X + 4Y ≤ 48
• X,Y ≥ 0
CHANGES TO THE RIGHT HAND
SIDES OF THE CONSTRAINTS
• It’s the change in Z for a 1 unit change in the value
of the RHS (called shadow price)
• -a shadow price is the maximum price that you
(management) is willing to pay for an extra unit of a
resource
FOR EXAMPLE:
1st Constraint: 4X + 2Y ≤ 60
2nd Constraint: 2X + 4Y ≤ 48
• In the 1st constraint let’s say that we will increase
the RHS to 70
• 1st Constraint(change): 4X + 2Y ≤ 70
FOR EXAMPLE:
• Old Optimum Solution:  Old Profit:

X= 12 Profit(Z) = 180(12) + 100(6)


Y= 6 Profit (Z) = P 2,760
• New Optimum Solution:  New Profit:
X= 15.34
Profit(Z) = 180(15.34) + 100(4.3
Y= 4.33
Profit (Z) = P 3,194.2
SHADOW PRICE CALCULATION:
• Shadow Price = Change in Z (Profit)
Change in RHS
SP = 434.2 (3,194.2-2,760)
10 (70-60)
SP= P 43.42
EXCEL SOLVER
GUIDE
NOTE:
• This is only a guide on how to use the
EXCEL SOLVER. Data presented is not the
data of the problem in this presentation.
EXCEL SOLVER
SOLUTION
Optimum
Solution
Allowable + and – shows
the ranges than can be
made as changes in the
objective coefficient.

Allowable + and – shows


the ranges in order for
the SP to be valid.
CHANGES
WITHIN
ALLOWABLE
RANGE
ORIGINALLY 180.
DECREASED BY 60
NO CHANGE

ORIGINALLY 2,760
CHANGES
OUTSIDE
THE
ALLOWABLE
RANGE
CHANGES
WITHIN
ALLOWABLE
RANGE
SHADOW PRICE CALCULATION:
• Shadow Price = Change in Z (Profit)
Change in RHS
SP = 866.67 (3,626.67-2,760)
20 (60-80)
SP= P 43.33 increased of profit per 1 unit
increase in RHS of the constraint.
END!

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