Sensitivity Analysis for Profit Maximization with Respect to Per Unit Cost of Subsidiary Raw Materials

Abstract

In this article the sensitivity analysis of an economic model is provided with detail mathematical analysis. To achieve maximum profit through sustainable way in the competitive global economy; an organization must scrutinize sensitivity analysis efficiently. In the study Cobb-Douglas production function is operated. Method of Lagrange multiplier is applied here when sensitivity analysis is investigated to obtain accurate results. The paper also uses the bordered Hessian and Jacobian to propel mathematical methods appropriately.