Case 1 Chapter 4

The decision variables are as follows:

T1 = number of television advertisements with rating of 90 and 4000 new customers

T2 = number of television advertisements with rating of 55 and 1500 new customers

R1 = number of radio advertisements with rating of 25 and 2000 new customers

R2 = number of radio advertisements with rating of 15 and 1200 new customers

N1 = number of newspaper advertisements with rating of 10 and 1000 new customers

N2 = number of newspaper advertisements with rating of 5 and 800 new customers

The Linear Programming Model initial objective function:

MAX 90T1+55T2+25R1+20R2+10N1+5N2

Then there are 10 constraints as given in the other hand out

Optimal Solution can be given like this

T1 + T2 = Television advertisements

R1 + R2 = Radio advertisements

N1 + N2 = Newspaper advertisements

Max Exposure Rating:

Max Customer Reached:

Advertising Schedule could be given in a table like this

Media

Number of Ads

Budget

Television

Radio

Newspaper

For part 4, and for the second set of results; Remove the constraint of customers from the linear programming model and use it to develop the objective function:

MAX4000T1+1500T2+2000R1+1200R2+1000N1+800N2

Solving provides the following Optimal Solution

T1 + T2 = Television advertisements

R1 + R2 =Radio advertisements

N1 + N2 =Newspaper advertisements

Total New Customers Reached:

Total Exposure Rating

90(10) + 55(4) + 25(15) + 20(13) + 10(20) + 5(35) = 2130

Advertising Schedule:

Media

Number of Ads

Budget

Television

Radio

Newspaper

Totals

information passage below:

The Flamingo Grill is an upscale restaurant located in St. Petersburg, Florida. To help plan an advertising campaign for the coming season, Flamingo's management team hired the advertising firm of Haskell & Johnson (HJ). The management team requested HJ's recommendation concerning how the advertising budget should be distributed across television, radio, and newspaper advertisements. The budget has been set at $279,000. In a meeting with Flamingo's management team, HJ consultants provided the following information about the industry exposure effectiveness rating per ad, their estimate of the number of potential new customers reached per ad, and the cost for each ad. Exposure New Customers Cost Advertising Media Rating per Ad per Ad per Ad Television 90 4000 $10,000 Radio 25 2000 $ 3,000 Newspaper 10 1000 $ 1,000 The exposure rating is viewed as a measure of the value of the ad to both existing customers and potential new customers. It is a function of such things as image, message recall, visual and audio appeal, and so on. As expected, the more expensive television advertisement has the highest exposure effectiveness rating along with the greatest potential for reaching new customers. At this point, the HJ consultants pointed out that the data concerning exposure and reach were only applicable to the first few ads in each medium. For television, HJ stated that the exposure rating of 90 and the 4000 new customers reached per ad were reliable for the first 10 television ads. After 10 ads, the benefit is expected to decline. For planning purposes, HJ recommended reducing the exposure rating to 55 and the estimate of the potential new customers reached to 1500 for any television ads beyond 10. For radio ads, the preceding data are reliable up to a maximum of 15 ads. Beyond 15 ads, the exposure rating declines to 20 and the number of new customers reached declines to 1200 per ad. Similarly, for newspaper ads, the preceding data are reliable up to a maximum of 20; the exposure rating declines to 5 and the potential number of new customers reached declines to 800 for additional ads. Flamingo's management team accepted maximizing the total exposure rating, across all media, as the objective of the advertising campaign. Because of management's concern with attracting new customers, management stated that the advertising campaign must reach at least 100,000 new customers. To balance the advertising campaign and make use of all advertising media, Flamingo's management team also adopted the following guidelines. Use at least twice as many radio advertisements as television advertisements. Use no more than 20 television advertisements. The television budget should be at least $140,000. The radio advertising budget is restricted to a maximum of $99,000. The newspaper budget is to be at least $30,000. HJ agreed to work with these guidelines and provide a recommendation as to how the $279,000 advertising budget should be allocated among television, radio, and newspaper advertising.

Total New Customers Reached:

Basically, there are two good media allocation solutions for this problem.

Attach both Excel solutions in Appendix and any other information/calculation

can someone please show me how to solve on excel and understand what i need to know?