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 and know the exact change of the objective function.

Question

Quizplus · Accepted Answer

The shadow price reflects the change in the objective function value per unit increase in the right-hand side of a binding constraint, assuming other conditions remain constant and the change is within the limits of the current basis.

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