ADM 2302 Lecture Notes - Lecture 5: Sensitivity Analysis

• School: University of Ottawa
• Department: Administration
• Course: ADM 2302
• Professor: Jonathan Yu- Meng L I

Document Summary

Sensitivity analysis part 1: dealing with uncertainty in the objective function. > in business applications, we often want to know how our solution is a ected by changes to : the data, the structure of the model, or , its assumptions. How much room for error do we have?" > such "what-if" questions can (in most cases) be answered by modifying the optimization model and solving it again. > however, for many changes it is possible to answer these questions directly, without such additional work, using sensitivity analysis. In addition, this sensitivity analysis information leads to important economic and managerial insights. Overview, sensitivity analysis: changes in objective coe cients only, changes in right-hand sides only. > we start with the e ect of changing a single coe cient (a) range of optimality (b) optimum objective value as a function of that coe cient ( beyond the range )