Reference no: EM131400012
Linear Programming: What-if (Sensitivity) Analysis
So far we have focused on finding an optimal solution to a linear programming model. It is important, but it is not the only information available or needed by management. Management also needs sensitivity information, or information about what happens when data values are changed.
Previously, in order to formulate a problem as a linear programming model in Excel, we had to take the data for granted or assumed that it was certain and we made decisions based on that data. In real life problems, this assumption or certainty is questionable; the data might be inaccurate. Linear programming has capability in terms of sensitivity analysis to address these uncertainties.
Sensitivity analysis is a systematic study of how sensitive solutions are to small changes in the data. There are three basic areas that sensitivity analysis provides answers: 1. How does the solution change when the objective function changes? 2. How does the solution change when resources available change? 3. How does the solution change when a constraint is added to the problem?
All these questions can be answered by the “Sensitivity Report” generated by Excel Solver. Let’s see how to create and analyze a sensitivity report through an example. The example we choose is the Wyndor Glass Co. case study we solved in Module 1. See page 163 in the Introduction to Management Science textbook for details regarding the Solver sensitivity report.
Remember, before solving the problem we have the figure below.
|
Develop an inventory ordering policy
: Dunstreet's Department Store would like to develop an inventory ordering policy of a 99 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the ordering policy for white percale sheets. How many sheets..
|
|
Managing ethical missteps-sweatshops to leadership
: In a narrative format, discuss the key facts and critical issues in the case. Nike: Managing Ethical Missteps-Sweatshops to Leadership in Employment Practices update any dated facts in this case with the most current information.
|
|
Discuss how social media can affect customers-managers
: Discuss how social media can affect customers, managers, and employees. Analyze positive and negative effects. Cite your sources and included references. (Priciples of Management)
|
|
Driving from your house to the closest grocery store
: Driving from your house to the closest grocery store.
|
|
Finding optimal solution to linear programming model
: So far we have focused on finding an optimal solution to a linear programming model. It is important, but it is not the only information available or needed by management. Management also needs sensitivity information, or information about what happe..
|
|
Business strategy of starbucks is important for the company
: What are the basic elements of a situation analysis? How can this approach to strategy lead to increased competitiveness? Provide a practical example. Explain why the business strategy of Starbucks is important for the company to succeed?
|
|
Spend some time in three different types of establishments
: Self-presentation is defined as any behavior that seeks to convey some image of self or some information about the self to other people. This includes any behavior that is meant to make an impression on others. Spend some time in three different type..
|
|
Strategic approach to its corporate social responsibility
: From the Harvard Business Review: Strategy & Society, The Link Between Competitive Advantage and Corporate Social Responsibility by Michael E. Porter and Mark R. Kramer. Anheuser-Busch wants to implement corporate social responsibility into its value..
|
|
What type of international strategy
: In 2004, Anheuser-Busch won the bidding war and delisted Harbin Beer as SABMiller pulled out of the auction. Harbin became a wholly owned subsidiary of Anheuser-Busch. What type of international strategy would you consider to be most appropriate for ..
|