Figure 13.33 shows the Solver sensitivity report for the ColPal Products. Using only the information in the sensitivity report, answer the following questions.

a. Suppose that the exposure for TV advertising was incorrectly estimated and should have been 875. How would the optimal solution have been affected?

b. Radio listening has gone down, and new mar­keting studies have found that the exposure has dropped to 150. How will this affect the optimal solution?

c. The marketing manager has increased the budget by $ 2,000. How will this affect the solution and total exposure?

d. The shadow price for the mix constraint (that at least 70% of the time should be allocated to TV) is – 250. The marketing manager was told that this means that if the percentage of TV advertising is increased to 71%, exposure will fall by 250. Explain why this statement is incorrect.

Sensitivity Report for ColPal Products

Transcribed Image Text:

H. 6 Objective Cell (Max) Cell Final Value 10937.5 7 Name 8 SAŞ17 TOTAL EXPOSURE 10 Decision Variable Cells 11 12 Reduced Objective Allowable Allowable Decrease 1E+30 190.0000001 800 950.0000005 950.0000001 Final Cost Coefficient Increase 350 Value Cell 13 $8$10 Minutes Radio 14 SC$10 Minutes TV Name 4.93 0.00 11.51 0.00 15 16 Constraints 17 18 Final Shadow Constraint Allowable Allowable R.H. Side Cel SD$13 Budget SD$14 TV Requirement 4.44089E-16 Narme Value Price Increase Decrease 19 $ 25,000.00 $ 0.44 25000 1E+30 25000 20 -250 3.75 43.75