Your company is planning its next marketing campaign across three online channels (Weibo, Wechat and Douyin)...
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Your company is planning its next marketing campaign across three online channels (Weibo, Wechat and Douyin) for markets in three cities (Beijing, Shanghai, and Guangzhou). Table 1 reports the expected number of added customers per dollar spent on each channel for the market in each city. Marketing spend is constrained by the available budget constraints: Budget per city: $200,000 for Beijing, $300,000 for Shanghai, and $250,000 for Guangzhou. Budget per channel: $300,000 on Weibo, $200,000 on Wechat, and $400,000 on Douyin. The company's objective is to maximize the total number of customers added through the marketing campaign. Table 1. Added customers per dollar spent on each channel and market in each city Channel Beijing Shanghai Guangzhou Weibo 7.69 7.90 8.65 5.16 4.11 5.73 Wechat 3.91 Douyin 5.31 3.84 (a) Please formulate a linear program for your company. (b) Develop a spreadsheet model to solve the LP. Make sure to show your work. (c) What is the optimal solution, and what is the optimal number of customers added? Run a sensitivity report for your model and answer the following questions. Please include the screenshot of the sensitivity report before answering the following questions. (d) You realize that the number of customers added per dollar spent on Weibo for Guangzhou is equal to 8.50 instead of 8.65. Does it affect the optimal solution? (e) Due to a budget reduction of $50,000, the headquarter decides to reduce the budget in one and only one of the three cities: Beijing, Shanghai, and Guangzhou. Assuming that each customer in all cities contributes equal profit, which city would you recommend to reduce the budget? How will the budget reduction affect the number of customers added through the marketing campaign? Your company is planning its next marketing campaign across three online channels (Weibo, Wechat and Douyin) for markets in three cities (Beijing, Shanghai, and Guangzhou). Table 1 reports the expected number of added customers per dollar spent on each channel for the market in each city. Marketing spend is constrained by the available budget constraints: Budget per city: $200,000 for Beijing, $300,000 for Shanghai, and $250,000 for Guangzhou. Budget per channel: $300,000 on Weibo, $200,000 on Wechat, and $400,000 on Douyin. The company's objective is to maximize the total number of customers added through the marketing campaign. Table 1. Added customers per dollar spent on each channel and market in each city Channel Beijing Shanghai Guangzhou Weibo 7.69 7.90 8.65 5.16 4.11 5.73 Wechat 3.91 Douyin 5.31 3.84 (a) Please formulate a linear program for your company. (b) Develop a spreadsheet model to solve the LP. Make sure to show your work. (c) What is the optimal solution, and what is the optimal number of customers added? Run a sensitivity report for your model and answer the following questions. Please include the screenshot of the sensitivity report before answering the following questions. (d) You realize that the number of customers added per dollar spent on Weibo for Guangzhou is equal to 8.50 instead of 8.65. Does it affect the optimal solution? (e) Due to a budget reduction of $50,000, the headquarter decides to reduce the budget in one and only one of the three cities: Beijing, Shanghai, and Guangzhou. Assuming that each customer in all cities contributes equal profit, which city would you recommend to reduce the budget? How will the budget reduction affect the number of customers added through the marketing campaign?
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