When mathematicians are presented with a linear programming problem, they will not only determine the optimal solution but will also supply what are called shadow prices for each resource. This chapter project develops the concept of a shadow price.
Consider the furniture manufacturing problem. The constraint for finishing is
Determine the optimal solution for the revised linear programming problem. What is the new maximum profit? By how much was the profit increased due to the additional hour for finishing? This amount is the shadow price.
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Finite Mathematics & Its Applications Plus Mylab Math With Pearson Etext -- Access Card Package (12th Edition)
- College Algebra (MindTap Course List)AlgebraISBN:9781305652231Author:R. David Gustafson, Jeff HughesPublisher:Cengage Learning