Question: Need step by step process with calculations and accurate solutions 1) Recall the following problem and review its Sensitivity Report: The Thermos Store would like
Need step by step process with calculations and accurate solutions
1) Recall the following problem and review its Sensitivity Report: The Thermos Store would like to determine the best way to allocate a monthly advertising budget of $8000 between local newspaper advertising and social media advertising. The store must spend the whole budget each month. Management decided that at least 30% of the budget must be spent on each type of media, and that the amount of money spent on local newspaper advertising cannot be more than twice the amount spent on social media advertising. A marketing consultant developed an index that measures audience exposure per dollar of advertising on a scale from 0 to 100 , with higher volumes implying greater audience exposure. If the value of the index for local newspaper advertising is 60 and the value of the index for social media advertising is 80 , how should the restaurant allocate its advertising budget in order to maximize the value of total audience exposure? Sensitivity Report a) A member of the marketing team is pushing to increase the minimum spending in local newspaper by $1000. She believes that will increase exposure. What is your expert opinion on this matter? b) A further review of the audience exposure of the local newspaper revealed that the index for local newspaper is closer to the index to social media, at about 75 . In response, management is questioning your recommendation. Management strongly believes that they should spend more than $2400 in loca[newspaper. What is your expert opinion on this matter? c) Would your answer be different for the previous question if the index of the local newspaper was 85 instead of 75 or 60 ? Explain your answer. d) The CEO would like to know how the total exposure would be affected if $2000 more were allocated to the monthly advertising budget. Please assume that the minimum spending for local newspaper advertising and social media advertising remain the same

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