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The Kiara Sinbad Cruise firm runs a three-night cruise to the Pacific Islands countries from Port Macquarie. The company wants to run TV ads
The Kiara Sinbad Cruise firm runs a three-night cruise to the Pacific Islands countries from Port Macquarie. The company wants to run TV ads promoting its cruises to high-income men, high-income women, and retirees. The company has decided to consider airing ads during prime time, afternoon soap operas, and during the evening news. The number of exposures (in millions) expected to be generated by each type of ad in each of the company's target audiences is summarized in the following table: High-income men High-income women Retirees PRIME TIME 6 3 SOAP OPERAS 3 4 7 EVENING NEWS 6 3 Ads during prime time, the afternoon soaps, and the news hour cost $120,000, $85,000, and $100,000, respectively. Kiara Sinbad Cruise firm wants to achieve the following goals: Goal 1: Spend approximately $900,000 on TV advertising. Goal 2: Generate approximately 45 million exposures among high-income men. Goal 3: Generate approximately 60 million exposures among high-income women. Goal 4: Generate approximately 50 million exposures among retirees. Now, a) Formulate a Goal Programming model for this problem. Assume overachievement of the first goal is equally as undesirable as underachievement of the remaining goals on a percentage deviation basis. b) Implement your model in a spreadsheet and solve it. c) How do you interpret the optimal solution for this problem? d) What solution allows the company to spend as close to $900,000 as possible without exceeding this amount? e) Assume that the company can spend no more than $900,000. What solution minimizes the maximum percentage underachievement of all the goals? f) Which of the two preceding solutions would you most prefer? Why?
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