Question: A car dealership needs to determine how to allocate its $20,000 advertising budget. They have estimated the expected profit from each dollar (X) spent in

A car dealership needs to determine how to allocate its $20,000 advertising budget. They have estimated the expected profit from each dollar (X) spent in four different advertising media as follows:

Medium Expected Profit

Newspaper ......100X0.7

Radio ........125X0.65

TV .........180X0.6

Direct Mail ......250X0.5

If the company wants to spend at least $500 on each medium, how should it allocate its advertising budget to maximize profit?

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