A company is planning a media campaign to promote its
products. Let R = the dollars spent on radio advertising
(expressed in $1000’s, so think 1 for $1000, and so on) and let M =
dollars spent on direct-mail advertising (also expressed in
$1000’s, so think 2 for $2000, and so on). A media budget of
$3 (for $3000) has been made available by the company. The
company has an estimate that its sales (S in $1000’s of dollars, so
think 3 for $3000, and so on) follow the function of media dollars
spent:
S = - 2R^2 - 10M^2 - 8RM +18R + 34M.
The object of the company is to maximize sales given its budget
constraint.
You will need to use Excel Solver several times on the same
problem by making modifications and saving answer reports as you go
along.
a-the first time you use solver to find the maximum sales given
the budget constraint set the upper limit to 1 on the
variables. The value for R = _____ and M = _______ and S =
________?
b-the second time you use solver to find the maximum sales given
the budget constraint set the upper limit to 2 on the
variables. The value for R = _____ and M = _______ and S =
________?
c-continue to use solver to find the maximum sales given the
budget constraint by incrementing the upper limit on the variables
by 1 until you are satisfied you have reached the final
solution. Each time record the value for R = _____ and M =
_______ and S = ________.
d-now increase the budget to 4 and find the maximum value of
sales given the budget and record R = ____ and M = _____ and S =
_____.
e-what is the shadow price or dual values on the budget
limit? I need a number here.
A company is planning a media campaign to promote its products. Let R = the dollars spent on radio advertising (express
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answerhappygod
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A company is planning a media campaign to promote its products. Let R = the dollars spent on radio advertising (express
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