How does sensitivity analysis differentiate between binding and non-binding constraints?
Welcome!
This community is for professionals and enthusiasts of our products and services.
Share and discuss the best content and new marketing ideas, build your professional profile and become a better marketer together.
This question has been flagged
2
Replies
123
Views
Sensitivity analysis differentiates between binding and non-binding constraints by analyzing the dual prices (shadow prices): binding constraints have non-zero dual prices, indicating sensitivity, while non-binding constraints have zero dual prices, indicating insensitivity.
Sensitivity analysis differentiates between binding and non-binding constraints by evaluating the solution:
- Binding Constraints: These hold equality at the optimal solution. Any change to their right-hand side directly affects the optimal solution.
- Non-Binding Constraints: These do not hold equality at the optimal solution; there is slack. Changes to their right-hand side do not impact the optimal solution unless they become binding.
This differentiation helps identify which constraints are critical for maintaining the current optimal solution.