Sensitivity Analysis

- Sensitivity analysis is performed after you find the optimal solution - It gives you a better understanding of the solution

o Helps you answer what-if questions - Even long-term strategy question

o Helps you understand the impact of any uncertainty in your data.

Sandwich Problem Max 4 T + 3 C S.T .6T + .3C 21 (Turkey)

.2C 5 (Bacon) .4T + .5C 20 (Bread) T, C 0

The sensitivity report provides a clever way to answer these questions without having to solve the problem again and again. The sensitivity report does have limitation and well see what those are. 1. Sensitivity Analysis for

Objective Coefficients

1. What if the objective coefficients

changed?

2. What if the RHS of one of the

constraints changed? These could change too, but

were not going to worry

about them.

Objective

Repeats the

optimal solutions

There are also

repeated

Two Steps 1) Check to see if the change were considering is within the allowable increase or allowable decrease.

Is (Allowable Decrease) < change < Allowable Increase

If its not, the change is too large to analyze using the sensitivity report. We would have to change the actual objective coefficient in our original spreadsheet and run the solver again to find out what would happen.

2) If it is within the allowable range, Then: The current solution will still be the optimal solution. The value of the objective function will change by the amount: (Change in Coefficient) * (Value of decision variable)