Question

The Chamber of Commerce periodically sponsors public service seminars and programs. Currently, promotional plans are under way for this year's program. Advertising alternatives include television, radio, and online. Audience estimates, costs, and maximum media usage limitations are as shown: Constraint Television Radio Online Audience per advertisement 100,000 18,000 40,000 Cost per advertisement $2,000 $300 $600 Maximum media usage 10 20 10 To ensure a balanced use of advertising media, radio advertisements must not exceed 50% of the total number of advertisements authorized. In addition, television should account for at least 10% of the total number of advertisements authorized. (a) If the promotional budget is limited to $18,200, how many commercial messages should be run on each medium to maximize total audience contact? Advertisement Alternatives No of commercial messages Television Radio Online What is the allocation of the budget among the three media? Advertisement Alternatives Budget ($) Television $ Radio $ Online $ What is the total audience reached? (b) By how much would audience contact increase if an extra $100 were allocated to the promotional budget? Increase in audience coverage of approximately

Answer 1

This given proble is example of Cost Optimization, and can be easily solved using linear programming.

These equations can be solved using MS Excel-Solver Add in.