Attached is the sensitivity report for the loan portfolio problem. Looking at th

Question

Attached is the sensitivity report for the loan portfolio problem. Looking at the sensitivity report, for decision variable X3 what do the Allowable Increase and the Allowable Decrease mean?

Variable Cells Ce Name SBS18 Changing Cels number of each decision variable x Changing cells number of each decision Variable) $D$18 Changing Cells (number of each decision variable) x3 $E$18 Changing Cells (number of each decision variable) x4 Changing Cells number of each decision variable x5 Constraints Ce Name $H$22 sig c.1 of total loans $H$23 sig furn .2 total $H$24 >J first m 3.2 total SH $25 first M >J 4(first+sec $H$26 amount to invest Reduced jective Allowable Allowable Final Value Cost Coefficient Increase Decrease 30 150000 0.12 0.03 0.032 720000 0.1 0.053333333 0.03 0.07 480000 0.03 0.304375 30 Final Shadow Constraint Allowable Allowable Price R.H. Side Increase Decrease Value -4.36557E-11 0.03 150000 150000 82077E-11 0.032 450000 150000 180000 0 180000 1E+30 5.82077E-11 720000 180000 -0.03 1500000 0974 1500000 1E+30 50000

Explanation / Answer

This decision variable tells us the range in which the coefficients of given decision variable in the objective function increased /decreased without changing the optimal solution. Here decision variable X3 increased by 0.053 and decreased by 0.03

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