Attached is the sensitivity report for the loan portfolio problem. Why do none o
ID: 421450 • Letter: A
Question
Attached is the sensitivity report for the loan portfolio problem. Why do none of the decision variables have a reduced cost? Adjustable Cells Final Value Reduced Objective Allowable Allowable Cost Coefficient Increase Decrease Name Cell $B$18 Changing Cells (number of each decision variable) x1 $C$18 Changing Cells (number of each decision variable) x2 SD$18 Changing Cells (number of each decision variable) x3 SE$18 Changing Cells (number of each decision variable) x4 50000 150000 720000 480000 2.96941E+1 0.032 0.03 0.12 0.03 0.1 0.053333333 0.0 0 0.03 0.304375 Constraints Final Value Shadow Constraint Allowable Allowable Increase Decrease 1E+30 1500000 Cell $H$22 Dollar constraint $H$23SL Mrk constraint .1 or -FM as % of total loan .2 or $B$18 Changing Cells (number of each decision variable) x1 $C$18 Changing Cells (number of each decision variable) x2 SD$18 Changing Cells (number of each decision variable) x3 $E$18 Changing Cells (number of each decision variable) x4 Name Price R.H. Side 1500000 0.0974 0.03 0.032 0.03 1500000 7.27596E-12 4.36557E-11 5.82077E-11 180000 150000 150000 720000 480000 150000150 450000 150000 720000180000 1E+30 1E+30 1E+30 1E+30 1E+30 180000 150000 150000 720000 480000Explanation / Answer
The decision variables in this case are all non-binding since the shadow prices are showing as zero. shadow price indicates the difference between current value and value at optimised solution. They are showing zero here
Please review the constraints.
In this casem the right hand side is independent of the decision variables and RHS will not change by varying these values
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