The cost associated with forgoing an opportunity; the money or other value sacrificed by choosing a nonoptimal course of action. In linear programming, the opportunity cost is the reduced cost of a variable not in the optimal basic solution. If a unit of a nonbasic variable is introduced into the solution, the optimal value of the objective function would decrease by an amount equal to the associated reduced cost. Simplex method.
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© 2001 Kluwer Academic Publishers
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Gass, S.I., Harris, C.M. (2001). Opportunity cost. In: Gass, S.I., Harris, C.M. (eds) Encyclopedia of Operations Research and Management Science. Springer, New York, NY. https://doi.org/10.1007/1-4020-0611-X_704
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DOI: https://doi.org/10.1007/1-4020-0611-X_704
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