You Are Faced with a Linear Programming Objective Function Of

question 27

Multiple Choice

You are faced with a linear programming objective function of: Max P = $20X + $30Y
And constraints of:
3X + 4Y = 24 (Constraint A)
5X - Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is True?

• A) You can change quantities of X and Y at no cost for Constraint B.
• B) For every additional unit of the objective function you create, you lose 0 units of B.
• C) For every additional unit of the objective function you create, the price of A rises by $7.50.
• D) The most you would want to pay for an additional unit of A would be $7.50.

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Definitions:

Perceptual and Behavioral Decision Traps

Cognitive biases or errors in judgment that can lead individuals to make irrational decisions.

Satisficing

A decision-making strategy that entails selecting the first option that meets a minimum threshold of acceptability, rather than searching for the optimal solution.

Outsourcing

The business practice of hiring a party outside a company to perform services or create goods that traditionally were performed in-house by the company's own employees and staff.

Complex Integration

In mathematics, it refers to the process of performing integration for complex functions; in systems theory, it involves the incorporation of various components into a coherent whole.