Sensitivity Analysis via

Graphical representation

1
The Galaxy Industries Production Problem –
A Prototype Example

• Galaxy manufactures two toy doll models:

– Space Ray.
– Zapper.
• Resources are limited to
– 1000 pounds of special plastic.
– 40 hours of production time per week.

2
The Galaxy Industries Production Problem –
A Prototype Example
• Marketing requirement
– Total production cannot exceed 700 dozens.
– Number of dozens of Space Rays cannot exceed
number of dozens of Zappers by more than 350.
• Technological input
– Space Rays requires 2 pounds of plastic and
3 minutes of labor per dozen.
– Zappers requires 1 pound of plastic and
4 minutes of labor per dozen. 3
The Galaxy Industries Production Problem –
A Prototype Example
• The current production plan calls for:
– Producing as much as possible of the more profitable product,
Space Ray ($8 profit per dozen).
– Use resources left over to produce Zappers ($5 profit
per dozen), while remaining within the marketing guidelines.
• The current production plan consists of:
Space Rays = 450 dozen 8(450) + 5(100)
Zapper = 100 dozen
Profit = $4100 per week
4
Management is seeking a
production schedule that will
increase the company’s profit.

5
A linear programming model
can provide an insight and an
intelligent solution to this problem.

6
 The Galaxy Linear Programming Model

• Decisions variables:
– X1 = Weekly production level of Space Rays (in dozens)
– X2 = Weekly production level of Zappers (in dozens).

• Objective Function:
– Weekly profit, to be maximized

7
The Galaxy Linear Programming Model

Max 8X1 + 5X2 (Weekly profit)

subject to
2X1 + 1X2 £ 1000 (Plastic)
3X1 + 4X2 £ 2400 (Production Time)
X1 + X2 £ 700 (Total production)
X1 - X2 £ 350 (Mix)
Xj> = 0, j = 1,2 (Nonnegativity)
8
The Graphical Analysis of Linear
Programming

The set of all points that satisfy all the

constraints of the model is called
a

FEASIBLE REGION

9
Using a graphical presentation
we can represent all the constraints,
the objective function, and the three
types of feasible points.

10
Graphical Analysis – the Feasible Region
X2

The non-negativity constraints

X1

11
 Graphical Analysis – the Feasible Region
X2

1000 The Plastic constraint

2X1+X2 £ 1000
700 Total production constraint:
X1+X2 £ 700 (redundant)
500

Infeasible
Production Feasible
Time
3X1+4X2 £ 2400 X1
500 700

12
 Graphical Analysis – the Feasible Region
X2
1000 The Plastic constraint
2X1+X2 £ 1000
700 Total production constraint:
X1+X2 £ 700 (redundant)
500
Infeasible
Production mix
constraint:
Production Feasible X1-X2 £ 350
Time
3X1+4X2£ 2400
X1
500 700
Interior points. Boundary points. Extreme points.
• There are three types of feasible points 13
 The search for an optimal solution
X2 Start at some arbitrary profit, say profit = $2,000...
1000 Then increase the profit, if possible...
...and continue until it becomes infeasible

700 Profit =$4360

500

X1
14
500
 Summary of the optimal solution
Space Rays = 320 dozen
Zappers = 360 dozen
Profit = $4360
– This solution utilizes all the plastic and all the production hours.

– Total production is only 680 (not 700).

– Space Rays production exceeds Zappers production by only 40

dozens.

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Extreme points and optimal solutions

– If a linear programming problem has an optimal

solution, an extreme point is optimal.

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 Multiple optimal solutions
• For multiple optimal solutions to exist, the objective
function must be parallel to one of the constraints

• Any weighted average of

optimal solutions is also an
optimal solution.

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The Role of Sensitivity Analysis
of the Optimal Solution
• Is the optimal solution sensitive to changes in
input parameters?

• Possible reasons for asking this question:

– Parameter values used were only best estimates.
– Dynamic environment may cause changes.
– “What-if” analysis may provide economical and
operational information.
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 Range of Optimality

• Range of Optimality
– The optimal solution will remain unchanged as long as
• An objective function coefficient lies within its range of
optimality
• There are no changes in any other input parameters.

– The value of the objective function will change if the

coefficient multiplies a variable whose value is nonzero.

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 Sensitivity Analysis of
Objective Function Coefficients.
1000 X2

M
Ma ax 4
x3
.75 X1 +
X 5X
1 +
Ma

5X 2
x8

2
X1
+5

500
X2

Max
2X + 5X
1
2

X1

20
500 800
 Sensitivity Analysis of
Objective
X
Function Coefficients.
1000 2
Ma
x8
X1

Range of optimality: [3.75, 10]

+5
X2

Ma
x1

500
0 X1

Ma
x3
+5

.75
X1
X2

+5
X2

400 600 800 X1 21

 Sensitivity Analysis of
Right-Hand Side Values

• In sensitivity analysis of right-hand sides of constraints

we are interested in the following questions:
– Keeping all other factors the same, how much would the
optimal value of the objective function (for example, the profit)
change if the right-hand side of a constraint changed by one
unit?
– For how many additional or fewer units will this per unit
change be valid?

22
 Shadow Prices

• Assuming there are no other changes to the

input parameters, the change to the objective
function value per unit increase to a right hand
side of a constraint is called the “Shadow Price”

23
 Shadow Price – graphical demonstration
The Plastic
constraint X2
When more plastic becomes available (the
plastic constraint is relaxed), the right hand
side of the plastic constraint increases.
1000
2X 1

Maximum profit = $4360

2X 1

+1
+1

x 2<
x 2<

=10

Maximum profit = $4363.4

=10

01

500
00

Shadow price =
4363.40 – 4360.00 = 3.40

Production time X1
constraint
500 24
 Range of Feasibility

• Assuming there are no other changes to the

input parameters, the range of feasibility is
– The range of values for a right hand side of a constraint, in
which the shadow prices for the constraints remain
unchanged.
– In the range of feasibility the objective function value changes
as follows:
Change in objective value =
[Shadow price][Change in the right hand side value]

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The Plastic
Range of Feasibility
constraint X2

Increasing the amount of

2X 1

plastic is only effective until a

+1

1000
x 2<

new constraint becomes active.

=10

Production mix A new active

00

constraint constraint
X1 + X2 £ 700
500
This is an infeasible solution
Production time
constraint

X1

500 26
The Plastic
Range of Feasibility
constraint 2X 1 X2

Note how the profit increases

+1

1000
as the amount of plastic
x 2£

increases.
100
0

500

Production time
constraint

X1

500 27
 Range of Feasibility
X2

Less plastic becomes available (the

1000 plastic constraint is more restrictive).
Infeasible
solution The profit decreases

500
2X1 + 1X2 £ 1100

A new active
constraint
X1

500 28