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Question 1 Blitz Beer has allotted $10,080 for radio advertising in Gotham City and must determine the placement of spot advertisements that will maximize increased
Question 1 Blitz Beer has allotted $10,080 for radio advertising in Gotham City and must determine the placement of spot advertisements that will maximize increased sales. Top-40 stations attract a heavier beer-drinking audience than golden-oldie stations do, but top-40 stations also charge more for each spot. The following data apply. Station Cost per spot Sales increase per spot Spots available Format A $100 $300 30 Top-40 B $50 $120 unlimited Golden-oldie $75 $150 unlimited Golden-oldie D $150 $400 40 Top-40 At least 25% of the spots must be placed with golden-oldie stations. (a) Formulate Blitz's problem as a Linear Programming problem, by assuming all the decision variables as non-negative real numbers. (20 marks) (b) Using Excel Solver, find the optimal solution of the Blitz's problem, i.e., the optimal values of all the decision variables and the optimal objective value. (Attach the computer printout, which includes the Formulat screenshot(AIP ti ay solution, Answer report and Sensitivity report to your solution.) (15 marks) (c) Now, consider all the decision variables as integers. Using Excel Solver, find the optimal solution of the Blitz's problem, i.e., the optimal values of all the decision variables and the optimal objective value. (Attach the computer printout, which includes the formulation at the optimal solution and the Answer report to your solution.) (10 marks) (d) Comment on the results of (b) and (c)
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