Instruction:

Each question has TWO spreadsheets (Formulation sheet and Report Sheet).

First sheet, need to design the spreadsheet and formulate the optimization model (DO NOT use solver function to solve the problem yet)

- You must WRITE objective function, constraint function and define the decision variables (Use Equation Editor)

Second sheet, solve the problem using SOLVER.

Question 1

The P&G Co. produces cleaning products for home use. This is a highly competitive market, and the company continually struggles to increase its small market share. Management has decided to undertake a major new advertising campaign that will focus on the following three key products:

A spray prewash stain remover.

A liquid laundry detergent.

A powder laundry detergent.

This campaign will use both television and print media. A commercial has been developed to run on national television that will feature the liquid detergent. The advertisement for the print media will promote all three products and will include cents-off coupons that consumers can use to purchase the products at reduced prices. The general goal is to increase the sales of each of these products (but especially the liquid detergent) over the next year by a significant percentage over the past year. Specifically, management has set the following goals for the campaign:

Sales of the stain remover should increase by at least 3 percent.

Sales of the liquid detergent should increase by at least 18 percent.

Sales of the powder detergent should increase by at least 4 percent.

Table 1 shows the estimated increase in sales for each unit of advertising in the respective outlets. (A unit is a standard block of advertising that P&G commonly purchases, but other amounts also are allowed.) The reason for 1 percent for the powder detergent in the Television column is that the TV commercial featuring the new liquid detergent will take away some sales from the powder detergent. The bottom row of the table shows the cost per unit of advertising for each of the two outlets.

Managements objective is to determine how much to advertise in each medium to meet the sales goals at a minimum total cost.

Table 1 Data for the P&G Co. Advertising

Increase in Sales per Unit of Asvertising

Product	Television	Print Media	Minimum Required Increase
Stain remover	0%	1%	3%
Liquid detergent	3	2	18
Power detergent	-1	4	4
Unit cost	1$ million	2$ Million