Shadow Prices: What Is One More Hour Worth?
This lesson is part of the course
In this lesson
You relax each constraint by one unit, re-solve the optimal corner and read the shadow price as the change in profit.
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Lessons in this course
- Formulating an LP: Variables, Objective & Constraints as Formulas Locked
- Feasibility Check: Which Candidate Plans Break a Constraint? Locked
- The Graphical Method: Constraint Lines & the Iso-Profit Line Locked
- Corner Points: Intersecting Two Lines with a 2×2 Solve Locked
- Evaluate the Objective at Every Corner & Pick the Best Locked
- Shadow Prices: What Is One More Hour Worth? Locked
- The Transportation Problem: Northwest Corner Rule & Cost Locked
- Assignment by Enumeration & a Blend Problem Check Locked