Suppose that the right-hand-side value of a given binding constraint is increased by one unit and within the lower and upper limit. Instead of rerunning the solution, the decision maker can simply check the shadow price to know the exact change of the objective function.

Question

Quizplus · Accepted Answer

The shadow price reflects the rate of improvement in the objective function value for a one-unit increase in the right-hand-side value of a binding constraint, assuming other conditions remain constant.

Suppose That the Right-Hand-Side Value of a Given Binding Constraint