Linear programming questions, please use Excel to solve them. Thank you!
6. Mahone Bay Marine Equipment Store has four different distribution channels available for marketing its product: in-store, direct mailing, business partners, and internet sales. The company has 600 units of product available for the current season, $5,000 budgeted for advertising, and a maximum of 1800 hours of labour available in its sales force. There is a restriction on the contract with the business partners that requires at least 150 units be distributed through them. The profit, advertising costs, and sales force time required for each unit of the marketing methods is shown in the following table: Profit/Unit Cost/Unit Time/Unit In-store 90 10 2 Mailing 84 8 Business Partners 70 3 Internet 60 15 3 9 0 Questions: Justify your answers with reference to the reports. (a) Set up a linear programming model to determine how many units should be dis- tributed through each channel to maximize the profit. (b) In the optimal solution, the company does not allocate any product to sell via the internet. The boss insists that the company has to sell some product via the internet. What would you suggest to the boss in terms of profit margin of selling product via the internet so that it is worthwhile for the company to sell some product there? (c) What is the effect on the company if your business partners demand an extra 10 units? (d) If the advertising budget increases by $100, what is the effect on profit? 6. Mahone Bay Marine Equipment Store has four different distribution channels available for marketing its product: in-store, direct mailing, business partners, and internet sales. The company has 600 units of product available for the current season, $5,000 budgeted for advertising, and a maximum of 1800 hours of labour available in its sales force. There is a restriction on the contract with the business partners that requires at least 150 units be distributed through them. The profit, advertising costs, and sales force time required for each unit of the marketing methods is shown in the following table: Profit/Unit Cost/Unit Time/Unit In-store 90 10 2 Mailing 84 8 Business Partners 70 3 Internet 60 15 3 9 0 Questions: Justify your answers with reference to the reports. (a) Set up a linear programming model to determine how many units should be dis- tributed through each channel to maximize the profit. (b) In the optimal solution, the company does not allocate any product to sell via the internet. The boss insists that the company has to sell some product via the internet. What would you suggest to the boss in terms of profit margin of selling product via the internet so that it is worthwhile for the company to sell some product there? (c) What is the effect on the company if your business partners demand an extra 10 units? (d) If the advertising budget increases by $100, what is the effect on profit
