Shadow price

The excel solver has a feature of sensibility analysis.

For example, we want to maximize a linear programming like this.

Run solver, and select the reports you want to see:

The sensibility will be in another spreadsheet.

What does a shadow price means?

For example, the shadow price for constraint2 is equal to 4.

It means that if I increase the right hand size of constraint2 in one unit, the objective function will increase 4 units.

Lets test it:

If I increase constraint2, from 166 to 167, and run solver again, the results will be as below.

The FO was previously 709. Now, it is 713, because the shadow price for this constraint is 4.

If shadow price is zero, it means this constraint is not restricting the problem.

One detail. If I increase too much the value of the RHS of the restriction, it can give another optimal solution.

The maximum I can increase is 14, according to the column “Permitido aumentar” in the Excel report.

Take a look in the file.

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