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FASOM Hamburg January 17-19, 2007

Reduced Cost

Shadow prices Technical Coefficients Objective Function Coefficients

Complementary Slackness

Reduced Cost Opt. Variable Level Shadow Price Opt. Slack Variable Level

Reduced Cost Equality

Links variables with individual equations Positive aij*Ui  costs (Maximization) Negative aij*Ui  benefits (Maximization)

Ex: Reduced Cost Computation

Ex: Row Summing

Fixing Non-sensible Models

Zero/large variables: look at cost and benefits of these variables in individual equations High shadow prices: indicate resource scarcity (check endowments, technical coefficients, units) In general, analyst needs a combination of mathematical and context knowledge

Conclusions

Large mathematical programming models are not necessarily black boxes Drivers for individual results can be traced and understood Generic misspecifications can and should always be corrected Systematic post-optimality analysis is by far better and faster than intuition and guesswork

IV Modifying FASOM

Possible Modicfications

Easy Difficult Data updates Data calculations Scenario anaysis Equation modifications

Documentation

Write log of changes in text file Place comments on purpose of programming statements in FASOM code Put „????“ where you make preliminary modifications

Frequent Errors

Units (Ex: 5 vs. 1 years) Inconsistent conditions Ignorance of GAMSCHK

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FASOM
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schneider
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FASOM Hamburg January 17-19, 2007
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period | region | data | gms | equ | equat | product | includ
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1/12/2007 12:12:23 PM
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