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Marketing Cost/Effectiveness Report from Ad Agency Type of Advertisement Exposure Level New Customers per Ad Cost per Ad TV 2 8,000 20,000 TV 1 1

Marketing Cost/Effectiveness Report from Ad Agency
Type of Advertisement Exposure Level New Customers per Ad Cost per Ad
TV 2 8,000 20,000
TV1 1 3,000 20,000
Radio 2 4,000 6,000
Radio2 1 2,400 6,000
Online 2 2,000 2,000
Online3 1 1,600 2,000
Notes:
1. TV ads lose effective over time, exposure level drop from 2 to 1 after a maximum of 10 ads
2. Radio ads lose effectiveness over time, exposure level drops from 2 to 1 after a maximum of 15 ads
3. Online ads lose effectiveness over time, exposure level drops from 2 to 1 after a maximum of 20 ads

The owner of Steel City has hired you to get these two tasks back on track after the abrupt departure of the manager in charge.Specifically, the owner has two requests:

  1. The owner wants to maximize total exposure across all types of advertisements (TV, Radio, and Online). How many of each type of ad should be purchased? How many potential customers will be reached? What is the effect of decreasing the advertising budget by 20%?You must document each step you take to solve the problem! The following guidelines must be followed when selecting the type of ads:
    1. The total advertising budget is $558,000
    2. Total exposure must be at least 200,000 customers
    3. Radio ads must be more numerous than TV ads. Use at least twice as many radio as TV ads
    4. TV ads are limited. Use no more 20 TV ads.
    5. The amount spent on TV ads should be at least $280,000
    6. The amount spent on radio ads should be less than $198,000
    7. The amount spent on online ads should be at least $60,000

Your answers MUST correctly specify a linear program, including objectives and constraints, to find the optimal solution; Linear program has only minor errors; handled ambiguity and offered feedback on the client's request; attempted to find anoptimal solution and described it

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