• Consider a firm that is planning an advertising campaign for a new product. Goals set for the campaign include exposure to at least 100,000 individuals, no fewer than 80,000 of whom have an annual income of at least $50,000, and no fewer than 40,000 of whom are single. For simplicity, assume that the firm has only radio and television media available for this campaign. One television advertisement costs $10,000 and is expected to reach an average audience of 20,000 persons. Ten thousand of these individuals will have an income of $50,000 or more, and 4,000 will be single. A radio advertisement costs $6,000 and reaches a total audience of 10,000, all of whom have at least $50,000 in income. Eight thousand of those exposed to a radio advertisement are single. It is summarized as below:

• 	Radio	Television
  Coast per ad	$6000	$ 10000
  Total audience per ad	10000	20000
  Audience per ad with income>$50000	10000	10000
  Unmarred audience per ad	8000	4000

• a. Using the simplex method, solve for firms cost minimization level of number of advertisements via both radio and television.
• b.What is the optimal level of advertisement cost?

Answer rating: 100% (QA)

Solution Ansa The Decision Variable is xNumber of advertiseme... View the full answer