Answer to Question #302637 in Excel for Ronald Kofi

Question

Question 1

The Unilever Company plans to allocate some or all of its monthly advertising budget of GH¢82,000 in the Mankato area. It can purchase local radio spots at GH¢120 per spot, local TV spots at GH¢600 per spot, and local newspaper advertising at GH¢220 per insertion.

The company's policy requirements specify that the company must spend at least GH¢40,000 on TV and allow monthly newspaper expenditures up to GH¢60,000.

The payoff from each advertising medium is a function of the size of its audience. The general experience of the firm is that the values of insertions and spots in terms of "audience points" (arbitrary unit), are as given below:

Radio 40 audience points per spot

TV 180 audience points per spot

Newspapers 320 audience points per insertion

(a) Formulate a linear programming model for this problem.

(b) Use solver to find optimal solution and sensitivity report.

Answer 1

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