What is the relationship between sensitivity analysis and dual prices?
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Dual prices, or shadow prices, provide the foundation for sensitivity analysis, quantifying the impact of changes in constraints or coefficients on the optimal solution in linear programming.
Sensitivity analysis and dual prices are closely related. Dual prices, or shadow prices, indicate the value of relaxing a constraint by one unit. Sensitivity analysis uses these prices to assess how changes in constraints affect the objective function. It helps decision-makers understand the economic implications of constraint adjustments, guiding resource allocation and project planning.