Figure 13.33 shows the Solver sensitivity report for the ColPal Products scenario in Problem 2.

Using only the information in the sensitivity report, answer the following questions.

a. Suppose that the exposure for TV advertising was incorrectly estimated and should have been 875.
How would the optimal solution have been affected?

b. Radio listening has gone down, and new marketing studies have found that the exposure has dropped to 150.

How will this affect the optimal solution?

c. The marketing manager has increased the budget by $2,000. How will this affect the solution and total exposure?

d. The shadow price for the mix constraint (that at least 70% of the time should be allocated to TV)
is –250. The marketing manager was told that this means that if the percentage of TV advertising is increased to 71%, exposure will fall by 250.
Explain why this statement is incorrect.

Transcribed Image Text:

A B C 6 Objective Cell (Max) 7 Cell Name 8 $A$17 TOTAL EXPOSURE 60 9 10 Decision Variable Cells E Final Value 10937.5 F 9 H 11 Final 12 Cell Name Value Reduced Objective Allowable Allowable Cost Coefficient Increase Decrease 13 $B$10 Minutes Radio 4.93 0.00 350 1E+30 190.0000001 14 $C$10 Minutes TV 11.51 0.00 800 950.0000005 950.0000001 15 16 Constraints 17 Final Shadow Constraint Allowable Allowable 18 Cell Name 19 $D$13 Budget 20 $D$14 TV Requirement Value Price $ 25,000.00 $ 0.44 4.44089E-16 R.H. Side Increase Decrease 25000 1E+30 25000 -250 0 3.75 43.75