2. WHAM, a local television station, has 20 thirty second commercial slots during prime time each...

 

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2. WHAM, a local television station, has 20 thirty second commercial slots during prime time each evening. Assume that it is currently October, and WHAM is selling advertising for the last week of November. The slots are priced at $4500 per slot, and WHAM has sufficient demand to sell all the slots at this price. However, since the last week of November is Thanksgiving, it believes that there may be several last minute takers for these advertising slots, and it can sell some slots at the last minute for $6000 a slot. Based on past information, WHAM has estimated that the demand for last minute slots at this price has the following distribution. 9 10 Probability 0.03 0.05 0.10 Last Minute Demand for Slots 11 12 13 14 0.15 0.20 0.15 0.10 15 0.05 16 17 0.05 0.05 18 0.05 Any advertising slots that remain unsold can be used by WHAM to promote its other programming, and WHAM places a $1000 value on using the slots this way. In setting up a model, focus on a single evening during the last week of November. A. Identify the objective, the decision(s), the parameters, and the constraints in the problem. 19 0.02 B. Create an influence diagram for the problem. C. Set up an Excel model to analyze the problem. If WHAM sells 5 of the advertising slots in advance, what is the expected value of the advertising revenue (per day) that the station will receive for the last week of November? (Note: Here you are NOT trying to make an optimal choice-we'll get to that later-here you are simply trying to calculate the output associated with one possible choice). 2. WHAM, a local television station, has 20 thirty second commercial slots during prime time each evening. Assume that it is currently October, and WHAM is selling advertising for the last week of November. The slots are priced at $4500 per slot, and WHAM has sufficient demand to sell all the slots at this price. However, since the last week of November is Thanksgiving, it believes that there may be several last minute takers for these advertising slots, and it can sell some slots at the last minute for $6000 a slot. Based on past information, WHAM has estimated that the demand for last minute slots at this price has the following distribution. 9 10 Probability 0.03 0.05 0.10 Last Minute Demand for Slots 11 12 13 14 0.15 0.20 0.15 0.10 15 0.05 16 17 0.05 0.05 18 0.05 Any advertising slots that remain unsold can be used by WHAM to promote its other programming, and WHAM places a $1000 value on using the slots this way. In setting up a model, focus on a single evening during the last week of November. A. Identify the objective, the decision(s), the parameters, and the constraints in the problem. 19 0.02 B. Create an influence diagram for the problem. C. Set up an Excel model to analyze the problem. If WHAM sells 5 of the advertising slots in advance, what is the expected value of the advertising revenue (per day) that the station will receive for the last week of November? (Note: Here you are NOT trying to make an optimal choice-we'll get to that later-here you are simply trying to calculate the output associated with one possible choice).

Answer rating: 100% (QA)

A Objective Maximize the expected revenue from selling advertising slots during the last week of November Decision Determine how many advertising slots to sell in advance and how many to save for last minute sales Parameters WHAM has 20 advertising slots during prime time each evening The price for an advertising slot ... View the full answer