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a. Formulate a linear programming model (identify and define decision variables, objective function and constraints) that can be used to determine the advertising budget allocation

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a. Formulate a linear programming model (identify and define decision variables, objective function and constraints) that can be used to determine the advertising budget allocation for the Flamingo Grill in order to maximize the total exposure rating. ( 20 points) b. Use Solver in Microsoft Excel to solve the model that you developed in part (a). Give the values of each decision variable and the objective function. Also indicate the total number of new customers reached. You MUST attach a copy of the solution report. (10 points) c. How would the total exposure change if an additional $10,000 were added to the advertising budget? Explain. (5 points) d. Comment on the ranges for the objective function coefficients. What do the ranges indicate about how sensitive the recommended solution is to HJ's exposure rating coefficients? Explain. (5 points) e. After reviewing HJ's recommendation, the Flamingo's management team asked how the optimal solution would change if the objective of the advertising campaign was to maximize the number of potential new customers reached. Use Solver in Microsoft Excel to solve this new model that you developed in part (e). Give the values of each decision variable and the objective function. Also indicate the total exposure rating. You MUST attach a copy of the solution report. ( 5 points) f. Compare the optimal solutions from part (b) and part (e). Which objective function is a better indicator of advertising effectiveness? Please comment ( 5 points) The Flamingo Grill is an upscale restaurant located in St. Petensburg, Florida. To help plan an advertising campaign for the coming season, Flaningo's management team hirod the advertising firm of Haskell \& Johnson (HJ). The management team requested HJ 's recommendation conceming how the advertising budget should be distributed across television, radio, and newspaper advertisenents. The budget has boen set at $279,000. In a meeting with Flamingo's managenent team, HJ consultants providod the following information about the industry exporure effectiveness rating per ad, their eatimate of the number of potential new customers reachod per ad, and the cost for each ad. The exposure rating is viewed as a measure of the value of the ad to boch existing customers and potential new customers. It is a function of such things as image, message recall, visual and audio appeal, and so on. As expectod, the more expensive television advertisement has the highest exposure effectiveness rating along with the greatest potential for reaching new customers. At this point, the HJ consultants pointed out that the data conceming exposure and reach were only applicable to the first few ads in each medium. For television, HJ stated that the exposure rating of 90 and the 4000 new customers reached per ad were reliable for the first 10 television ads. After 10 adk, the benefit is expected to decline. For planning parposes, HJ recommended reducing the exposure nating to 55 and the extimate of the potential new cestomers reached to 1500 for any television ads beyond 10. For mdio ads, the proceding data are reliable up to a maximum of 15 ads. Beyond 15 ads, the expocure rating declines to 20 and the number of new customens reached declines to 1200 per ad. Similarly, for newspaper ads, the precoding data are reliable up to a maximum of 20 ; the exposure rating declines to 5 and the potential number of new customers reached doclines to 800 for additional ads. Flamingo's management team acecpted maximizing the total exposure rating, across all media, as the objective of the advertising campaign. Because of management's concern with attracting new customers, management statod that the advertising campaign must reach at least 100,000 new customerx. To balance the advertising campaign and make use of all advertising medin, Flamingo's management team also adopted the following guidelines. - Use at least twice as many radio advertisements as television advertisements. - Use no more than 20 television advertikements. - The television badget should be at least $140,000. - The radio advertising budget is restricted to a maximum of $99,000. - The newspeper budget is to be at least $30,000. HJ agreed to work with these guidelines and provide a rocormanendation as to how the $279,000 advertising budget should be allocated among television, radio, and newspaper

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