Question 1: Optimization (25 marks) You are the CFO of Atom Electronics that specialises in home-based electronics. Your CEO, Hannah, has teased industry watchers with plans to release Atom's very first entry into the smartphone market, the Atom. Rumours are that it will incorporate gPro action-camera technology, will have 5-day-long battery life and will come packed with a mini-drone attachment to allow for drone photo-taking. . What she has not made public is Atom's intention to release 3 variants: the standard-sized 5.8-inch, Atom, the 6.3-inch phablet, Atom Peta, and the mid-range 5.5-inch, Atom Aplos. . As new entrants to the already-crowded smartphone market, Hannah is wary of the risk this presents. She had instructed a team of market research analysts to assess each of the 3 variants. Their analysis has been summarised into the following table*: Atom Variant Atom Peta Atom Aplos Atom Est. Advertorial Types Expected Profit per market market 9 $120,000 3 $80,000 7 $90,000 per Est. Marketing Budget per market $475,000 $250,000 $400,000 * The figures in the table are provided on a per market basis (i.e. The Atom Peta has an estimated marketing budget of $475,000 per market, expected profits of $120,000 per market, and is estimated to require 9 types of advertisement collaterals per market to be considered as having a successful marketing campaign). Note that the advertorial types are not related to marketing costs as their costs have been factored in as part of the design team's budget. The marketing team has proposed a possible 17 key markets for the Atom Peta, 12 for the Atom Aplos and 30 for the Atom. As the CFO, you have been tasked by Hannah to work within a marketing budget of $20 million and to determine the optimal number of key markets each Atom variant should be sold in. The global campaign should focus on maximising profits and advertorial types (because they have already been designed and should be fully utilised). Required a. Formulate an MOLP model for this problem. b. Implement your model in a spreadsheet to determine the optimal number of key markets that each Atom variant should be targeted at. (i) There are three objectives in this problem (i) to maximise profit, (ii) to maximise (i.e. fully utilise) all advertorial types, and (iii) to keep within the $20 million budget. What is the best possible value attainable for each objective in the problem? Assuming neutrality in the weight of all objectives. (ii) What solution will you obtain if Hannah decides that the ratio of importance in meeting the objectives are 5:2:1 respectively, with respect to b(i)? Question 1: Optimization (25 marks) You are the CFO of Atom Electronics that specialises in home-based electronics. Your CEO, Hannah, has teased industry watchers with plans to release Atom's very first entry into the smartphone market, the Atom. Rumours are that it will incorporate gPro action-camera technology, will have 5-day-long battery life and will come packed with a mini-drone attachment to allow for drone photo-taking. . What she has not made public is Atom's intention to release 3 variants: the standard-sized 5.8-inch, Atom, the 6.3-inch phablet, Atom Peta, and the mid-range 5.5-inch, Atom Aplos. . As new entrants to the already-crowded smartphone market, Hannah is wary of the risk this presents. She had instructed a team of market research analysts to assess each of the 3 variants. Their analysis has been summarised into the following table*: Atom Variant Atom Peta Atom Aplos Atom Est. Advertorial Types Expected Profit per market market 9 $120,000 3 $80,000 7 $90,000 per Est. Marketing Budget per market $475,000 $250,000 $400,000 * The figures in the table are provided on a per market basis (i.e. The Atom Peta has an estimated marketing budget of $475,000 per market, expected profits of $120,000 per market, and is estimated to require 9 types of advertisement collaterals per market to be considered as having a successful marketing campaign). Note that the advertorial types are not related to marketing costs as their costs have been factored in as part of the design team's budget. The marketing team has proposed a possible 17 key markets for the Atom Peta, 12 for the Atom Aplos and 30 for the Atom. As the CFO, you have been tasked by Hannah to work within a marketing budget of $20 million and to determine the optimal number of key markets each Atom variant should be sold in. The global campaign should focus on maximising profits and advertorial types (because they have already been designed and should be fully utilised). Required a. Formulate an MOLP model for this problem. b. Implement your model in a spreadsheet to determine the optimal number of key markets that each Atom variant should be targeted at. (i) There are three objectives in this problem (i) to maximise profit, (ii) to maximise (i.e. fully utilise) all advertorial types, and (iii) to keep within the $20 million budget. What is the best possible value attainable for each objective in the problem? Assuming neutrality in the weight of all objectives. (ii) What solution will you obtain if Hannah decides that the ratio of importance in meeting the objectives are 5:2:1 respectively, with respect to b(i)
