The Shadow Price for a Constraint Is the Amount the Objective

question 75

True/False

The shadow price for a constraint is the amount the objective function will increase if one more unit of the constraint is obtained.

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Definitions:

Vendor-managed Inventory

A supply chain strategy where the supplier assumes responsibility for managing inventory levels at the customer's premises.

Distribution Center

A warehouse or storage facility where products are stored and from which they are distributed to retailers or customers.

Stock

Shares representing ownership in a company or commodities or goods held in inventory by a business.

Just-in-time (JIT)

An inventory management strategy that arranges the receipt of resources and materials right at the moment they are needed, reducing storage costs.