Sensitivity Analysis of Inputs of an Organization: A Profit Maximization Exploration

Abstract

This article tries to discuss sensitivity analysis of various inputs of an organization during profit maximization investigations. In this study Cobb-Douglas production function is analyzed with a detail mathematical analysis. The method of Lagrange multiplier is a very useful and powerful technique in multivariate calculus, and it is applied here to obtain higher dimensional unconstrained problem from the lower dimensional constrained one. In the article determinant of the 6×6 bordered Hessian matrix and 6×6 Jacobian are operated for consulting sensitivity analysis efficiently.