5. William Tell Inc. can advertise its products on local radio and TV, or in newspapers. The advertising budget is limited to $10k a month. Each minute of advertising on radio costs $15 and each minute on TV costs $300. A newspaper ad costs $50. The company likes to advertise on radio at least twice as much as on TV. In the meantime, the use of at least five newspaper ads and not more than 400 minutes of radio advertising a month is recommended. Past experience shows that advertising on TV is 50 times more effective than radio and 10 times more effective than in newspapers. a) Determine the optimum allocation of the budget to the three media. b) Are the limits set on radio and newspaper advertising justifiable economically? c) If the monthly budget is increased by 50%, would this result in a proportionate increase in the overall effectiveness of advertising?

5. William Tell Inc. can advertise its products on local radio and TV, or in newspapers. The advertising budget is limited to $10k a month. Each minute of advertising on radio costs $15 and each minute on TV costs $300. A newspaper ad costs $50. The company likes to advertise on radio at least twice as much as on TV. In the meantime, the use of at least five newspaper ads and not more than 400 minutes of radio advertising a month is recommended. Past experience shows that advertising on TV is 50 times more effective than radio and 10 times more effective than in newspapers. a) Determine the optimum allocation of the budget to the three media. b) Are the limits set on radio and newspaper advertising justifiable economically? c) If the monthly budget is increased by 50%, would this result in a proportionate increase in the overall effectiveness of advertising?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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