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Identify the decision variables for this problem, using clear notation. Use these decision variables to formulate the firm’s objective function: Linear Equation, UOL, UK
| University | University of London (UOL) |
| Subject | Linear Equation |
Task 1
- Identify the decision variables for this problem, using clear notation.
- Use these decision variables to formulate the firm’s objective function, clearly stating what the objective is.
- Use the information in Tables 1 and 2 above to identify the constraints for this problem.
- Use what you have identified in 1-3 above to formulate and present the complete linear programming model for this problem.
Task 2
- Enter the linear programming model you have derived in 4 above into Solver and obtain the optimal solution to the problem.
- Extract the solution from Solver and state the value of the objective function and the values of the decision variables and summarise the results.
Task 3
- Using Solver extract a Sensitivity Report for the problem.
- Extract the slack and surplus variables from the Sensitivity Report and interpret their meaning.
- Using the results of the sensitivity report indicates whether the optimal solution of the problem is unique or if there are alternative optimal solutions? Give reasons for your answer.
- Present a brief interpretation of the ranging information on the objective function coefficients presented in the Sensitivity Report for this problem.
Task 4
- Identify the shadow prices from the sensitivity report and interpret their meaning.
- Using the shadow price on component 1 indicates the impact on the objective function of increasing its availability by 1 barrel. What is the upper limit of the availability of component 1 for which this shadow price is valid?
- What would be the impact of increasing the availability of component 3 by 1 unit?
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