Question: Data for this months advertising problem for a certain company is described in the table below: Media Type Number of Customers Reached per time unit

Data for this months advertising problem for a certain company is described in the table below:

Media Type

Number of Customers Reached per time unit of an Advertisement

Cost ($) per time unit of an Advertisement

Maximum Time Available per Month

Exposure Quality Units per time unit of an Advertisement

Daytime TV

1000

1500

15

65

Evening TV

2000

3000

10

90

Daily newspaper

1500

400

25

40

Sunday newspaper magazine

2500

1000

4

60

Radio

300

100

30

20

At most $30,000 can be spent on advertisements this month. There must be at least 10 time units of TV ads. At most $18,000 may be spent on TV ads. At least 50,000 customers must be reached. The objective is to maximize total exposure quality.

The SOLVER formulation and output is shown below.

DTV

ETV

DN

SN

R

10

0

25

2

30

65

90

40

60

20

2370

Available DTV

1

10

<=

15

Available ETV

1

0

<=

10

Available DN

1

25

<=

25

Available SN

1

2

<=

4

Available R

1

30

<=

30

Budget

1500

3000

400

1000

100

30000

<=

30000

TV restriction 1

1

1

10

>=

10

TV restriction 2

1500

3000

15000

<=

18000

Customers reached

1000

2000

1500

2500

300

61500

>=

50000

The optimal value of the objective function is 2370.

Microsoft Excel Sensitivity Report

Variable Cells

Final

Reduced

Objective

Allowable

Allowable

Cell

Name

Value

Cost

Coefficient

Increase

Decrease

$C$8

DTV

10

0

65

25

65

$D$8

ETV

0

RC

90

65

1E+30

$E$8

DN

25

0

40

1E+30

16

$F$8

SN

2

0

60

40

16.66666667

$G$8

R

30

0

20

1E+30

14

Constraints

Final

Shadow

Constraint

Allowable

Allowable

Cell

Name

Value

Price

R.H. Side

Increase

Decrease

$H$10

Available DTV

10

SP

15

1E+30

AD

$H$11

Available ETV

0

0

10

1E+30

10

$H$12

Available DN

25

16

25

5

5

$H$13

Available SN

2

0

4

1E+30

2

$H$14

Available R

30

14

30

20

20

$H$15

Budget

30000

0.06

30000

2000

2000

$H$16

TV restriction 1

10

-25

10

1.333333333

1.333333333

$H$17

TV restriction 2

15000

0

18000

1E+30

3000

$H$18

Customers reached

FA

0

50000

11500

1E+30

Note that each question below is to be considered independently of all others.

  • The Company would like to spend at least 20% of the advertisement cost on radio. Provide the algebraic formulation of this constraint. (3 points)

  • Some values in the Sensitivity report were deleted by the Professor. Complete the table below: Write a brief description of each item deleted using LP terminology and record its corresponding value that belongs in the Sensitivity report. (8 points: 2 points each)

Number

Item

Description

Value

1

RC

2

SP

3

AD

4

FA

  • What is the new optimal value of the objective function, and what are the optimal values of the decision variables (describe verbally the results via a managerial statement), if the objective function coefficient for DN were to decrease from 40 to 30? Justify. (6 points)

  • If the right hand side of the second constraint (Available ETV) were to increase from 10 to 13, what would be the new optimal value of the objective function? Justify. (3 points)

  • If the right hand side of the seventh constraint (TV restriction 1) were decreased from 10 to 9.5, what would be the new optimal value of the objective function? Justify. (4 points).

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