Question
One final case for you to crack! A local apparel producer, Steel City Gear, needs help, and fast! Their operations expert quit recently to join
One final case for you to crack! A local apparel producer, Steel City Gear, needs help, and fast! Their operations expert quit recently to join the Peace Corp, and they were in the middle of two important tasks: a manufacturing floor reorganization project and deciding how to allocate their advertising budget between TV, radio, and online advertisements. The marketing manager also wants to take advantage of your expertise by analyzing an upcoming promotional campaign: a t-shirt giveaway for each home game that the Steelers win this year. The departed operations specialist left some spreadsheets on the office computer relating to the project, but they are unsure how to make best use of the information. The marketing manager consulted Vegas betting sites to ascertain the probility that the Steelers win each of their home games this season, but does not know how to use this data to estimate the cost of the promotion.
Marketing Data from Ad Agency | ||
Type of Advertisement | Exposure per Ad | Cost per Ad |
TV ads 1-6 | 12,000 | 30,000 |
TV ads 7 and over | 4,500 | 30,000 |
Radio ads 1-12 | 6,000 | 9,000 |
Radio ads 13 and over | 3,600 | 9,000 |
Online ads 1-18 | 3,000 | 4,000 |
Online ads 19 and over | 2,400 | 4,000 |
Game | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
Probability the Steelers Win | 0.55 | 0.6 | 0.45 | 0.4 | 0.65 | 0.55 | 0.45 | 0.7 |
- The owner wants to maximize total exposure across all types of advertisements (TV, Radio, and Online). There is one important fact that must be accounted for: the more you advertise in a certain medium, the less effective they become. For instance, consider the television ad data above. The first 6 tv ads will each reach 12,000 people. Each subsequent tv ad will only reach 4,500 people. How many of each type of ad should be purchased? How many potential customers will be reached? What is the effect of increasing the advertising budget by 15%? You must document each step you take to solve the problem! The following guidelines must be followed when selecting the type of ads:
- The total advertising budget is $752,000
- The ads must reach at least 300,000 customers
- Radio ads must be more numerous than TV ads. Use at least twice as many radio as TV ads
- TV ads are limited. Use no more 12 TV ads.
- The amount spent on TV ads should be at least $330,000
- The amount spent on radio ads should be less than $300,000
- The amount spent on online ads should be at least $90,000
- Set up a spreadsheet simulation model with 1,000 trials for which whether Pittsburg wins or loses each game is a random variable. Suppose for each game that the Steelers win, Steel City will spend $3,000 on a t-shirt giveaway following the game. What is the mean and standard deviation of the number of wins during the season? What is the mean and standard deviation of the cost of the promotion?
I need guidance on how to work through excel for the questions.
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