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Jaycie'stChildren'stClothing Jaycie'stChildren'stClothingtistatretailertthattsellsthigh-endtclothestforttoddlerst(agest1-3) primarilytintshoppingtmalls.tJaycie'stalsothastatsuccessfultInternet-basedtsalestdivision.tRecently DavetWalker,tvice-presidenttoftthete-commercetdivision,thastbeentgiventthe directivettotexpandtthetcompany'stInternettsales.tHetcommissionedtatmajortstudytontthe effectivenesstoftInternettadstplacedtontnewstWebtsites.tThetresultstweretfavorable:tCurrent patronstwhotpurchasedtviatthetInternettandtsawtthetadstontnewstWebtsitestspenttmore,ton average,tthantdidtcomparabletInternettcustomerstwhotdidtnottseetthetads. WithtthistnewtinformationtontInternettads,tWalkertcontinuedttotinvestigatethowtnewtInternet customerstcouldtmostteffectivelytbetreached.tOnetoftthesetideastinvolvedtstrategically purchasingtadstontnewstWebtsitestpriorttotandtduringtthetholidaytseason.tTotdeterminetwhich newstsitestmighttbetthetmostteffectivetfortads,tWalkertconductedtatfollow-uptstudy.tAnte-mail questionnairetwastadministeredttotatsampletoft1200tcurrenttInternettcustomersttotascertain whichtoft30tnewstsitesttheytregularlytvisit.tThetideatistthattWebtsitestwiththightproportionstof currenttcustomertvisitstwouldtbetviabletsourcestoftfuturetcustomerstoftJaycie'stproducts. Walkertwouldtlikettotascertaintwhichtnewstsitestshouldtbetselectedtfortads.tThetproblemtis complicatedtbecausetWalkertdoestnottwantttotcounttmultipletexposures.tSo,tiftatrespondent visitstmultipletsitestwithtJaycie'stadstortvisitstatgiventsitetmultiplettimes,tthattrespondenttshould betcountedtastreachedtbuttnottmoretthantonce.tIntothertwords,tatcustomertistconsidered reachedtifthetortshethastvisitedtattleasttonetWebtsitetwithtantJaycie'stad. Datatfromtthetcustomerte-mailtsurveythavetbegunttottrickletin.tWalkertwantsttotdevelopta prototypetmodeltbasedtontthetcurrenttsurveytresults.tSotfar,t53tsurveysthavetbeentreturned.tTo keeptthetprototypetmodeltmanageable,tWalkertwantsttotproceedtwithtmodeltdevelopment usingtthetdatatfromtthet53treturnedtsurveystandtusingtonlytthetfirstttentnewstsitestintthe questionnaire.tThetcoststoftadstpertweektfortthettentWebtsitestaretgiventpartiallytintthe

Jaycie's\tChildren's\tClothing Jaycie's\tChildren's\tClothing\tis\ta\tretailer\tthat\tsells\thigh-end\tclothes\tfor\ttoddlers\t(ages\t1-3) primarily\tin\tshopping\tmalls.\tJaycie's\talso\thas\ta\tsuccessful\tInternet-based\tsales\tdivision.\tRecently Dave\tWalker,\tvice-president\tof\tthe\te-commerce\tdivision,\thas\tbeen\tgiven\tthe directive\tto\texpand\tthe\tcompany's\tInternet\tsales.\tHe\tcommissioned\ta\tmajor\tstudy\ton\tthe effectiveness\tof\tInternet\tads\tplaced\ton\tnews\tWeb\tsites.\tThe\tresults\twere\tfavorable:\tCurrent patrons\twho\tpurchased\tvia\tthe\tInternet\tand\tsaw\tthe\tads\ton\tnews\tWeb\tsites\tspent\tmore,\ton average,\tthan\tdid\tcomparable\tInternet\tcustomers\twho\tdid\tnot\tsee\tthe\tads. With\tthis\tnew\tinformation\ton\tInternet\tads,\tWalker\tcontinued\tto\tinvestigate\thow\tnew\tInternet customers\tcould\tmost\teffectively\tbe\treached.\tOne\tof\tthese\tideas\tinvolved\tstrategically purchasing\tads\ton\tnews\tWeb\tsites\tprior\tto\tand\tduring\tthe\tholiday\tseason.\tTo\tdetermine\twhich news\tsites\tmight\tbe\tthe\tmost\teffective\tfor\tads,\tWalker\tconducted\ta\tfollow-up\tstudy.\tAn\te-mail questionnaire\twas\tadministered\tto\ta\tsample\tof\t1200\tcurrent\tInternet\tcustomers\tto\tascertain which\tof\t30\tnews\tsites\tthey\tregularly\tvisit.\tThe\tidea\tis\tthat\tWeb\tsites\twith\thigh\tproportions\tof current\tcustomer\tvisits\twould\tbe\tviable\tsources\tof\tfuture\tcustomers\tof\tJaycie's\tproducts. Walker\twould\tlike\tto\tascertain\twhich\tnews\tsites\tshould\tbe\tselected\tfor\tads.\tThe\tproblem\tis complicated\tbecause\tWalker\tdoes\tnot\twant\tto\tcount\tmultiple\texposures.\tSo,\tif\ta\trespondent visits\tmultiple\tsites\twith\tJaycie's\tads\tor\tvisits\ta\tgiven\tsite\tmultiple\ttimes,\tthat\trespondent\tshould be\tcounted\tas\treached\tbut\tnot\tmore\tthan\tonce.\tIn\tother\twords,\ta\tcustomer\tis\tconsidered reached\tif\the\tor\tshe\thas\tvisited\tat\tleast\tone\tWeb\tsite\twith\tan\tJaycie's\tad. Data\tfrom\tthe\tcustomer\te-mail\tsurvey\thave\tbegun\tto\ttrickle\tin.\tWalker\twants\tto\tdevelop\ta prototype\tmodel\tbased\ton\tthe\tcurrent\tsurvey\tresults.\tSo\tfar,\t53\tsurveys\thave\tbeen\treturned.\tTo keep\tthe\tprototype\tmodel\tmanageable,\tWalker\twants\tto\tproceed\twith\tmodel\tdevelopment using\tthe\tdata\tfrom\tthe\t53\treturned\tsurveys\tand\tusing\tonly\tthe\tfirst\tten\tnews\tsites\tin\tthe questionnaire.\tThe\tcosts\tof\tads\tper\tweek\tfor\tthe\tten\tWeb\tsites\tare\tgiven\tpartially\tin\tthe following\ttable,\tand\tthe\tbudget\tis\t$10,000\tper\tweek.\tThe\tcomplete\tdata\tfile\tis:\t\"Ch9\tJaycie's. For\teach\tof\tthe\t53\tresponses\treceived,\twhich\tof\tthe\tten\tWeb\tsites\tare\tregularly\tvisited\tis\tgiven as\tshown\tbelow. For\ta\tgiven\tcustomer-Web\tsite\tpair,\ta\t\"1\"\tindicates\tthat\tthe\tcustomer\tregularly\tvisits\tthat\tWeb site,\tand\ta\t\"0\"\tindicates\tthat\tthe\tcustomer\tdoes\tnot\tregularly\tvisit\tthat\tsite. Managerial\tReport: 1. Develop\ta\tmodel\tthat\twill\tallow\tJaycie's\tto\tmaximize\tthe\tnumber\tof\tcustomers\treached for\ta\tbudget\tof\t$10,000\tfor\tone\tweek\tof\tpromotion. 2. Solve\tthe\tmodel.\tWhat\tis\tthe\tmaximum\tnumber\tof\tcustomers\treached\tfor\tthe\t$10,000 budget? 3. Perform\ta\tsensitivity\tanalysis\ton\tthe\tbudget\tfor\tvalues\tfrom\t$5,000\tto\t$35,000\tin increments\tof\t$5,000.\tConstruct\ta\tgraph\tof\tpercentage\treach\tversus\tbudget.\tIs\tthe additional\tincrease\tin\tpercentage\treach\tmonotonically\tdecreasing\tas\tthe\tbudget allocation\tincreases?\tWhy\tor\twhy\tnot?\tWhat\tis\tyour\trecommended\tbudget?\tExplain

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