ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
Bartleby Related Questions Icon

Related questions

Question

excel solver 

1. Media Planning. GreenLawns provides a lawn fertilizing and weed control service. The company
is adding a special aeration treatment as a low-cost extra service option that it hopes will help
attract new customers. Management is planning to promote this new service in two media: radio
and direct-mail advertising. A media budget of $3,000 is available for this promotional campaign.
Based on past experience in promoting its other services, GreenLawns has obtained the following
estimate of the relationship between sales and the amount spent on promotion in these two media:
S-2R²10M² - 8RM +18R+ 34M
expand button
Transcribed Image Text:1. Media Planning. GreenLawns provides a lawn fertilizing and weed control service. The company is adding a special aeration treatment as a low-cost extra service option that it hopes will help attract new customers. Management is planning to promote this new service in two media: radio and direct-mail advertising. A media budget of $3,000 is available for this promotional campaign. Based on past experience in promoting its other services, GreenLawns has obtained the following estimate of the relationship between sales and the amount spent on promotion in these two media: S-2R²10M² - 8RM +18R+ 34M
where
S = total sales in thousands of dollars
R = thousands of dollars spent on radio advertising
M =
thousands of dollars spent on direct-mail advertising
GreenLawns would like to develop a promotional strategy that will lead to maximum sales subject
to the restriction provided by the media budget.
a. What is the value of sales if $2,000 is spent on radio advertising and $1,000 is spent on direct-
mail advertising?
b. Formulate an optimization problem that can be solved to maximize sales subject to the media
budget of spending no more than $3,000 on total advertising.
c. Determine the optimal amount to spend on radio and direct-mail advertising. How much in
sales will be generated?
expand button
Transcribed Image Text:where S = total sales in thousands of dollars R = thousands of dollars spent on radio advertising M = thousands of dollars spent on direct-mail advertising GreenLawns would like to develop a promotional strategy that will lead to maximum sales subject to the restriction provided by the media budget. a. What is the value of sales if $2,000 is spent on radio advertising and $1,000 is spent on direct- mail advertising? b. Formulate an optimization problem that can be solved to maximize sales subject to the media budget of spending no more than $3,000 on total advertising. c. Determine the optimal amount to spend on radio and direct-mail advertising. How much in sales will be generated?
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Economics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education