Question

The Sea Wharf Restaurant would like to determine the best way to allocate a monthly advertising budget of $1,000 between newspaper advertising and radio advertising. Management decided that at least 25% of the budget must be spent on each type of media and that the amount of money spent on local newspaper advertising must be at least two and a half times the amount spent on radio advertising. A marketing consultant developed an index that measures audience exposure per dollar of advertising on a scale from 0 to 100, with higher values implying greater audience exposure. If the value of the index for local newspaper advertising is 50 and the value of the index for spot radio advertising is 80, how should the restaurant allocate its advertising budget to maximize the value of total audience exposure?

(a)	Formulate a linear programming model that can be used to determine how the restaurant should allocate its advertising budget in order to maximize the value of total audience exposure. If the constant is "1" it must be entered in the box. If your answer is zero enter “0”.
	Let N = amount spent on newspaper advertising R = amount spent on radio advertising
	Max N + R s.t. N + R = Budget N + R ≥ Newspaper min N + R ≥ Radio min N + R ≥ R Allocation min. ratio.
(b)	Develop a spreadsheet model and solve the problem using Excel Solver. If required, round your answer to two decimal places.
	Newspaper Radio Dollars Allocated $ $
	Total Exposure Index

Will you show me how to set up the problem step by step and solve in excel and show illustrate with screenshots? Please also include solutions.

Answer 1

a) The restaurant should allocate its advertising budget in order to maximize the value of total audience exposure. If the constant is "1" it must be entered in the box. If your answer is zero enter “0”.

Let N	= amount spent on newspaper advertising
R	= amount spent on radio advertising

b) Developing a spreadsheet model

Solution

Dollars allocated: Newspaper = 66.67 and Radio = 33.33

Exposure = 60,000