Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Soapbox is a local band that plays classic and contemporary rock. The band members charge $600 for a three-hour gig. They would like to

image text in transcribed

Soapbox is a local band that plays classic and contemporary rock. The band members charge $600 for a three-hour gig. They would like to play at least 30 gigs per year but need to determine the best way to promote themselves. The most they are willing to spend on promotion is $2,500. The possible promotion options are playing free gigs, making a demo CD, hiring an agent, handing out fliers, and creating a Web site. Each free gig costs them $300 for travel and equipment but generates about three paying gigs. A high-quality studio demo CD should help the band book 20 gigs but will cost $1,000. A demo CD made on home recording equipment will cost $400 but may result in only ten bookings. A good agent will get the band 13 gigs but will charge $1,500. The band can create a Web site for $400 and would expect to generate six gigs from this exposure. They also estimate that they may book one gig for every 500 fliers they hand out, which would cost $0.08 each. They don't want to play more than six free gigs or send out more than 2,500 fliers, and can only produce one high-quality demo CD, produce one home demo CD, hire one agent, and make one Web site. Develop and solve an integer optimization model to find the best promotion strategy to maximize their profit. Which combination of promotional options and quantities maximizes the profit within the constraints? (Type whole numbers.) Promotional Option Free gigs High-quality demo CD Homemade demo CD Agent Fliers Number Web site

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Analysis Valuation Using Financial Statements

Authors: Paul M. Healy

5th edition

1111972303, 978-1111972301

More Books

Students also viewed these Accounting questions