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What is the trade-off between advertising expenditures and increased sales for Hawley Co. If the advertising budget to be increased, how it would affect the
What is the trade-off between advertising expenditures and increased sales for Hawley Co.
If the advertising budget to be increased, how it would affect the production plan?
Assume that you increased the advertising budget by the amount of the allowable increase, how this advertising budget change would affect the optimal production plan?
Costs and prices: r=regular time; o = overtime | I Selling price Material costs Production costs Unit profit Table lamps (T) Floor lamps (F) Tr To Fr FO I 120 120 150 150 66 66 85 85 16 18 16 18 38 36 49 47 Department 1 Ceiling lamps (c) Pendant lamps (P) a co Pr Po 100 100 160 50 50 80 12 15 12 38 35 68 Department 2 Decision Variables: r Co 24000 Pr Po 350000 Units produced 55000 Tr 60000 T 0 To Fr Fo 0 218000 F C 180000 0 Advertising max (Profit) = 8640200 LHS 81800 Constraints: Capacity constraints: Department 1 regular time Department 1 overtime Department 2 regular time Department 2 overtime Demand constraints: Table lamps Floor lamps Ceiling lamps Pendant lamps RHS 100000 25000 90000 24000 90000 24000 60000 21800 79000 35000 60000 21800 100000 35000 Advertising constraint 18000 18000 Costs and prices: r=regular time; o = overtime | I Selling price Material costs Production costs Unit profit Table lamps (T) Floor lamps (F) Tr To Fr FO I 120 120 150 150 66 66 85 85 16 18 16 18 38 36 49 47 Department 1 Ceiling lamps (c) Pendant lamps (P) a co Pr Po 100 100 160 50 50 80 12 15 12 38 35 68 Department 2 Decision Variables: r Co 24000 Pr Po 350000 Units produced 55000 Tr 60000 T 0 To Fr Fo 0 218000 F C 180000 0 Advertising max (Profit) = 8640200 LHS 81800 Constraints: Capacity constraints: Department 1 regular time Department 1 overtime Department 2 regular time Department 2 overtime Demand constraints: Table lamps Floor lamps Ceiling lamps Pendant lamps RHS 100000 25000 90000 24000 90000 24000 60000 21800 79000 35000 60000 21800 100000 35000 Advertising constraint 18000 18000Step by Step Solution
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