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Reconsider the example of choosing the advertising budget at VRX that is presented in Section 1.4. In addition to the VRX2000 VRX also has a

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Reconsider the example of choosing the advertising budget at VRX that is presented in Section 1.4. In addition to the VRX2000 VRX also has a higher-end virtual-reality headset, the VRX3000. This model sells for $191 and the variable cost for producing the headset is $2. The quarterly fixed costs associated with the VRX3000 are $495 VRX would like to determine the best level of advertising for the VRX 3000 . Past data for advertising and sales are given in the table below. Click here for the Excel Data File a. Use Excel to create a scatter pior to help visualize the relationship between Sales and advertising VRX thinks the same type of square-root relationship between sales and advertising found for the VRX2000 in Section 1.4 applles to the VRX3000 as well, that is, Sales Advertising+b. Using Excel, create a new scatter plot with Sales on the vertical axis and the square root of advertising on the horizontal axis. Click here for the Excel Data File a. Use Excel to create a scatter plot to help visualize the relationship between Sales and advertising. VRX thinks the same type of square-root relationship between sales and advertising found for the VRX2000 in Section 1.4 vertical axis and the square root of advertising on the horizontal axis. b. Use Excel's trendline feature to determine the value for a and b that provides the best fit for the prediction formula Sales Advertising+b. Using the prediction formula from part b, bulld an optimization model to determine the best level of advertising for the VRX3000. Solve the model with Solver. c. What is the best level of advertising and the corresponding estimate for total profit? Complete this question by entering your answers in the tabs below. Vzxuu upumization model Parameters: Unit Variable Cost Unit Revenue Fixed Cost Decision Variable: Advertising Budget Prediction Formula: Sales ax+b a b Expected Units Sold Total Revenue Total Variable Cost Fixed Cost Advertising Cost $495 $695 $80,000 Advertising $26,000 $56,000 $6,000 $36,000 $96,000 $46,000 so $16,000 Square Root of Advertising 161 237 77 190 310 214 0. 126 276 Unit Sales 560 742 372 604 902 689 192 488 Total Profit

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