excel solver for mac nt generating sensitivity report

It would help if you analyzed to know what the return on an investment after certain years is. For example, monthly, you are investing ₹4,500. Example #2Īssume you are investing money in mutual funds through SIP planning. We can analyze and choose the plan or idea according to our wishes.

In this case, you need to pay a monthly EMI of ₹15,499. If you want to let us say ₹3,000 per month as spare cash, you need to negotiate with the banker for a maximum of 15.5% for 3.5 years. So, cannot spend all the ₹18,500 savings money for your salary. In this volatile world, you need some cash all the time. You need to pay a monthly EMI of rupees if you can negotiate for this rate. The Allowable Increase and Allowable Decrease fields in the report show the range of increases and decreases for which the Reduced Costs and Shadow Prices remain constant.You need to negotiate with the bank for an interest rate of 18.5% per annum for 3 years. In the example report above, increasing the number of electronics units from 600 to 601 will allow the Solver to increase total profit by $25. The Shadow Price measures the change in the objective function’s value per unit increase in the constraint’s bound. “Tightening” a binding constraint (making it more strict) will worsen the objective function’s value conversely, loosening a binding constraint will improve the objective. This is called a binding constraint, and its value was driven to the bound during the optimization process. The Shadow Price for a constraint is nonzero only when the constraint is equal to its bound. In the example Sensitivity Report above, the dual value for producing speakers is -2.5, meaning that if we were to tighten the lower bound on speakers (move it from 0 to 1), our total profit would decrease by $2.50. The reduced cost measures the change in the objective function’s value per unit increase in the variable’s value. Moving the variable’s value away from the bound (or tightening the bound) will worsen the objective function’s value conversely, “loosening” the bound will improve the objective. a non-negativity constraint) and no upper bound. In this example problem, all variables have a lower bound of zero (i.e. The reduced cost for a variable is nonzero only when the variable’s value is equal to its upper or lower bound at the optimal solution. Reduced Costs are the most basic form of sensitivity analysis information. Interpreting Reduced Costs and Shadow Prices In this module we will focus on the Sensitivity Report for linear models.Īn example of a Sensitivity Report generated for a simple Product Mix example is shown below. It is available for models that do not contain any integer or binary constraints (which we will learn about later in this course).

The Sensitivity Report provides classical sensitivity analysis information for both linear and nonlinear programming problems.

Excel solver for mac nt generating sensitivity report