The amount 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 concept described in the question refers to the reduced cost, which measures by how much the objective function coefficient of a variable would have to improve before it becomes favorable to include that variable in the solution. Specifically, the reduced cost of a non-basic decision variable is equal to the difference between its objective function coefficient and the shadow price of the corresponding constraint. Thus, by comparing the reduced costs of different variables, we can identify which ones are the most promising candidates for entering or leaving the basis, depending on whether their reduced costs are negative or positive, respectively. The dual price (A) refers to the value of an additional unit of a resource in the objective function. The surplus variable (B) represents a variable added to the constraints to transform them into equalities. The upper limit (D) refers to the maximum allowable value of a decision variable.

The Amount the Objective Function Coefficient of a Decision Variable