Suppose that the right-hand-side value of a given binding constraint is increased by one unit and within the lower and upper limit. How would this change affect the objective function?
A) The objective function will change by an amount equal to the reduced cost.
B) The objective function will change by an amount equal to the shadow price.
C) The objective function will change by an amount equal to the lower limit of the sensitivity report.
D) The objective function will change by an amount equal to the upper limit of the sensitivity report.

Question

Quizplus · Accepted Answer

The objective function will change by an amount equal to the shadow price when the right-hand-side value of a binding constraint is increased by one unit, assuming the change is within the lower and upper limit. The shadow price represents the rate of improvement in the objective function value per unit increase in the right-hand side of a constraint.

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