The amount that the objective function coefficient of a decision variable would have to improve before that variable would have a positive value in the solution is the
A)dual price.
B)surplus variable.
C)reduced cost.
D)upper limit.

Question

Quizplus · Accepted Answer

The reduced cost measures the amount by which the objective function coefficient of a decision variable would have to improve in order for that variable to have a positive value in the solution. Therefore, option C is the correct answer. Option A (dual price) refers to the amount by which the optimal value of the objective function would improve if the right-hand side of a constraint were increased by one unit. Option B (surplus variable) refers to a decision variable that has a positive value in the optimal solution of a maximization problem because the corresponding constraint is not binding. Option D (upper limit) refers to a constraint that imposes an upper limit on the value of a decision variable.

The Amount That the Objective Function Coefficient of a Decision