16 terms

binding constraint

a constraint that forms the optimal corner point of the feasible solution space

constraints

limitations that restrict the available alternatives

decision variables

amounts of either inputs or outputs

enumeration approach

substituting the coordinates of each corner point into the objective function to determine which corner point is optimal

feasible solution space

the set of all feasible combination of decision variables as defined by the constraints

graphical linear programming

graphical method for finding optimal solutions to two-variable problems

objective function

mathematical statement of profit for a given solution

parameters

numerical constants

range of feasibility

range of values for the RHS of a constraint over which the shadow price remains the same

range of optimality

range of values over which the solution quantities of all the decision variables remain the same

redundant constraint

a constraint that does not form a unique boundary of the feasible solution space

sensitivity analysis

assessing the impact of potential changes to the numerical values of an LP model

shadow price

amount by which the value of the objective function would change with a one-unit change in the RHS value of the constraint.

simplex

a linear programming algorithm that can solve problems having more than two decision variables

surplus

when the values of decision variables are substituted into a greater than or equal to constraint the amount by which the resulting value exceeds the right-hand-side value.

Slack

when the values of decision variables are substituted into a less than or equal to constraint the amount by which the resulting value is less than the right-hand-side value.