Sensitivity analysis may be used to
A)experiment with possible future changes in the firm that may affect profits.
B)determine whether a corner point of the feasible region actually yields optimal profit.
C)replace the simplex method.
D)reduce the number of variables in a complex LP problem.

Question

Quizplus · Accepted Answer

Sensitivity analysis is used to experiment with possible changes in the values of parameters in the LP problem, such as changes in the constraints or objective function coefficients. This helps to determine the impact of these changes on the optimal solution and thereby helps managers make decisions about future changes that will affect profits. Option B is incorrect because corner points of the feasible region always yield optimal profit in LP problems. Option C is incorrect because sensitivity analysis is a part of the simplex method. Option D is incorrect because sensitivity analysis does not necessarily reduce the number of variables in an LP problem.

Sensitivity Analysis May Be Used to