Firm XYZ, which operates in France and Germany, wants to optimize its advertising spending across these...

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Firm XYZ, which operates in France and Germany, wants to optimize its advertising spending across these two countries. Currently XYZ spends a total of 20,192 (USD '000) with 15,603 (USD '000) in France and 4,589 (USD '000) in Germany. Please refer the first work sheet of the attached excel file (XYZ.xlxs) for details on current sales, gross margin and net margin. Based on the historical advertising and sales data, XYZ has computed sales at different advertising levels (Refer the second sheet of the attached excel file). Please use MEXL and the attached excel file to answer the following questions. 1) Calibrate the sales response curves for France and Germany using ADBUDG model. Copy the two curves as part of the answer and comment on the difference of the two curves. [20 points] 2) If XYZ's next year's advertising budget is 25,000 (USD '000), how should it allocate its advertising budget across France and Germany to achieve maximum net margin? [10 points] How much are the optimal net margin and the corresponding sales level? [10 points] 3) Assume XYZ can spend as much advertising dollars as it wants. What will be the total advertising spending, allocation across the two countries, and the optimized net margin? [20 points] Firm XYZ, which operates in France and Germany, wants to optimize its advertising spending across these two countries. Currently XYZ spends a total of 20,192 (USD '000) with 15,603 (USD '000) in France and 4,589 (USD '000) in Germany. Please refer the first work sheet of the attached excel file (XYZ.xlxs) for details on current sales, gross margin and net margin. Based on the historical advertising and sales data, XYZ has computed sales at different advertising levels (Refer the second sheet of the attached excel file). Please use MEXL and the attached excel file to answer the following questions. 1) Calibrate the sales response curves for France and Germany using ADBUDG model. Copy the two curves as part of the answer and comment on the difference of the two curves. [20 points] 2) If XYZ's next year's advertising budget is 25,000 (USD '000), how should it allocate its advertising budget across France and Germany to achieve maximum net margin? [10 points] How much are the optimal net margin and the corresponding sales level? [10 points] 3) Assume XYZ can spend as much advertising dollars as it wants. What will be the total advertising spending, allocation across the two countries, and the optimized net margin? [20 points]

Answer rating: 100% (QA)

Here are the answers 1 The sales response curves for France and Germany using ADBUDG model are F... View the full answer