The Accounting Review Vol. 45 No. 2 1970
Some Extensions of Sensitivity Analysis.
Abstract
In summary, there are three basic observations: 1. If an input has a variable effect on the objective equation values and if it is fully consumed, then the basis will not change as long as its cost does not increase by an amount greater than the input's shadow price. The lower limit on the cost of such an input is-∞. If an input has the variable effect mentioned in #1 but is not fully consumed, then the limits of the change in its cost is given by the limits of the change allowed in the objective equation value of its corresponding slack variable. Thus, it may be desirable to include a known non-bottleneck resource in the model to determine the sensitivity of its cost. 3. In the set of all fully consumed inputs, simultaneous changes within the respective ranges will not cause the sensitivity analysis to be invalid.
- DOI
- 10.2308/tar-4482373
- Volume
- 45
- Issue
- 2
- Pages
- 223-234
- Language
- en
- Sources
- crossref openalex