According to the Sensitivity Report, which of the following is true if the capacity at Atlanta is increased by 230 units?
A) the total cost can be reduced by $.09 per unit
B) the total cost at Atlanta increases by $9
C) the total cost per unit will reduce by $.09 to Memphis
D) the shadow price at Atlanta will increase to $0.09

Question

Quizplus · Accepted Answer

The shadow price, or dual value, indicates how much the objective function value (in this case, total cost) will change with a one-unit increase in the capacity of a resource (here, Atlanta's capacity). If the shadow price for Atlanta's capacity is $0.09, increasing the capacity by any amount will reduce the total cost by $0.09 per unit for each additional unit of capacity added, up to the limit of the increase's applicability as defined by the sensitivity report.

According to the Sensitivity Report, Which of the Following Is