SENSITIVITY
ANALYSIS
MARY JOYCE P. ALCAZAR
Instructor I
Department of Industrial Engineering and Technology
College of Engineering and Information Technology
Cavite State University – Main Campus
First Semester, AY 2018 – 2019
SENSITIVITY ANALYSIS
- is concerned with how changes in an
LP’s parameters affect the optimal
solution.
SENSITIVITY ANALYSIS
This topic demonstrates the general idea of sensitivity
analysis. Two cases will be considered:
A. Sensitivity of the optimum solution to changes in
the availability of the resources (right-hand side of
the constraints)
B. Sensitivity of the optimum solution to changes in
unit profit or unit cost (coefficients of the objective
function)
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Example:
JobCo produces two products on two machines. A unit
of product 1 requires 2 hours on machine 1 and 1 hour
on machine 2. For product 2, a unit requires 1 hour on
machine 1 and 3 hours on machine 2. The revenues per
unit of products 1 and 2 are $30 and $20, respectively.
The total daily processing time available for each
machine is 8 hours. Determine the optimal solution.
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DECISION VARIABLES
Let: x1 = the number of units of product 1 to be produced daily
x2 = the number of units of product 2 to be produced daily
z = total daily profit
OBJECTIVE FUNCTION
Max z = $30x1 + $20x2
CONSTRAINTS (Subject To)
2x1 + x2 ≤ 8 (processing time available for Machine 1)
x1 + 3x2 ≤ 8 (processing time available for Machine 2)
NON-NEGATIVITY CONSTRAINTS
x1 , x 2 ≥ 0
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What will happen if we increase the capacity of
Machine 1 from 8 hours to 9 hours?
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The rate of change in optimum z resulting from
changing machine 1 capacity from 8 hours to 9 hours
can
be computed as follows:
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The computed rate provides a direct link between
the model input (resources) and its output (total
revenue) that represents the unit worth of a resource –
that is, the change in the optimal objective value per
unit change in the availability of the resource.
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Referring to the example, this means that a unit
increase (decrease) in machine 1 capacity will increase
(decrease) revenue by $14.
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Although unit worth of a resource is an apt
description of the rate of change of the objective
function, the technical name dual or shadow price is
now standard in the LP literature.
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The dual price of $14/hr
remains valid for changes
(increases or decreases) in
machine 1 capacity that
move its constraint parallel
to itself to any point on the
line segment.
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This means that the range of
applicability of the given dual price
can be computed as:
Minimum machine 1 capacity
(at 0, 2.67)
= (2*0)+(1*2.67) = 2.67 hrs
Maximum machine 1 capacity (at
8,0)
= (2*8)+(1*0) = 16 hrs
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We can thus conclude that the
dual price of $14/hr will remain
valid for the range:
2.67 hrs ≤ Machine 1 capacity ≤ 16 hrs
QUIZ 7
1. Determine the dual price for Machine 2 capacity and
the range for which it is applicable. (100 points)
(30 minutes)
QUIZ 7
Answer:
The dual price for Machine 2 which is $2/hr will
remain applicable for the range:
4 hrs ≤ Machine 2 capacity ≤ 24 hrs
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The computed limits for machine 1 and 2 are
referred to as the feasibility ranges.
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The dual prices allow making economic decisions
about the LP problem, as the following questions
demonstrate:
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1. If JobCo can increase the capacity of both
machines, which machine should receive higher
priority?
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1. If JobCo can increase the capacity of both
machines, which machine should receive higher
priority?
The dual prices for machine 1 and 2 are $14/hr and $2/hr,
respectively. This means that each additional hour of machine
1 will increase revenue by $14, as opposed to only $2 for
machine 2. Thus, priority should be given to machine 1.
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2. A suggestion is made to increase the capacities of
machines 1 and 2 at the additional cost of $10/hr. Is
this advisable?
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2. A suggestion is made to increase the capacities of
machines 1 and 2 at the additional cost of $10/hr. Is
this advisable?
For machine 1, the additional net revenue per hour will be
14 – 10 = $4 and for machine 2, the net will be 2 – 10 = - $8.
Hence, only the capacity of machine 1 should be increased.
QUIZ 8
1. If the capacity of machine 1 is increased from the
present 8 hours to 13 hours, how will this increase
impact the optimum revenue? (50 points)
(10 minutes)
QUIZ 8
Answer:
The dual price for machine 1 is $14 and is applicable
in the range (2.67 – 16 hrs). The proposed increase to 13
hours falls within the feasibility range. Hence, the
increase in revenue is $14*(13-8) = $70, which means
that the total revenue will be increased to (current
revenue + change in revenue) = 128 + 70 = $198.
