Question
The M&F Department projects that each $160 invested in advertising Widgets in a particular period creates additional demand for one Widget in the next period.
The M&F Department projects that each $160 invested in advertising Widgets in a particular period creates additional demand for one Widget in the next period. The corresponding values for Gadgets and Flugels are $120 and $180, respectively. However, the total advertising budget is limited to $70,000 for the entire planning horizon.
NOTE: I am only requesting help with one part of this problem. For reference, the overall problem is to determine the marketing, production, distribution, inventory strategy that maximizes profit.
- TOTAL production requirements (Plant A + Plant B):
Period 1: Widgets 70, Gadgets 200, Flugels 140
Period 2: Widgets 125, Gadgets 300, Flugels 175
Period 3: Widgets 185, Gadgets 295, Flugels 205
Period 4: Widgets 190, Gadgets 245, Flugels 235
Period 5: Widgets 200, Gadgets 240, Flugels 230
Question (the part of the problem I am stuck on): How would ADDITIONAL DEMAND (and subsequent production) be incorporated into the LP model? Only in the objective function? Or, both objective function and constraints? If so, please provide methodology.
A constraint for the <= $70K in advertising dollars has been included.
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