The reduced cost for a decision variable that appears in a Sensitivity Report indicates the change in the optimal objective function value that results from changing the right-hand side of the nonnegativity constraint from
A)1 to 0.
B)0 to 1.
C)-1 to 0.
D)0 to -1.

Question

Quizplus · Accepted Answer

The reduced cost for a decision variable measures how much the objective function coefficient can decrease before a different variable becomes more profitable to increase. Therefore, changing the right-hand side of the nonnegativity constraint from 0 to 1 would increase the optimal objective function value by the reduced cost amount, making the reduced cost positive. Changing the right-hand side from 1 to 0 would decrease the optimal objective function value by the reduced cost amount, making the reduced cost negative. Changing the right-hand side from 0 to -1 or from -1 to 0 would not directly affect the optimal objective function value.

The Reduced Cost for a Decision Variable That Appears in a Sensitivity