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Excel Shadow Prices in Minimization

This document summarizes the output from solving a linear minimization problem in Excel. It explains that Excel reports dual variables, or shadow prices, as the change in objective value from a 1 unit increase in the right-hand side of each constraint. It also lists the objective as minimizing -1*X1 + -2*X2 and identifies the three constraints in the problem as -2X1 + X2 <= 2, -1X1 + X2 <=3, and X1 <= 3.

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Rasha Yatmeen
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37 views1 page

Excel Shadow Prices in Minimization

This document summarizes the output from solving a linear minimization problem in Excel. It explains that Excel reports dual variables, or shadow prices, as the change in objective value from a 1 unit increase in the right-hand side of each constraint. It also lists the objective as minimizing -1*X1 + -2*X2 and identifies the three constraints in the problem as -2X1 + X2 <= 2, -1X1 + X2 <=3, and X1 <= 3.

Uploaded by

Rasha Yatmeen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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This is output from a MINIMIZATION problem.

I want to remind you that when Excel reports dual


variables (shadow prices), the shadow price = (Objective value AFTER right hand side change of +1) –
(Objective value BEFORE RHS change). Excel does not care if the problem is a maximization or a
minimization when reporting dual variables (unlike some other solvers).

Objective = Minimize (-1*X1) + (-2*X2).

$K$8 is the constraint -2X1 + X2 <= 2; $K$9 is the constraint -1X1 + X2 <=3; $K$10 is the constraint X1 <=
3.

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