A hardware store will run an advertising campaign using radio and newspaper. Eve

Question

A hardware store will run an advertising campaign using radio and newspaper. Every dollar spent on radio advertising will reach 60 people in the "Under $30,000" market, and 50 people in the "Over $30,000" market. Every dollar spent on newspaper advertising will reach 80 people in the "Under $30,000" market, and 30 people in the "Over $30,000" market. If the store wants to reach at least 570,000 people in the "Under $30,000" market and 600,000 people in the "Over $30,000" market, how much should it spend on each type of advertising to minimize the cost?

Explanation / Answer

DECISION VARIABLES INITIAL ASSUMPTION MONEY SPENT ON RADIO AD.=R 0 MONEY SPENT ON PAPER AD.= P 0 PEOPLE REACHED BY RADIO AD.. UNDER 30000 MARKET = R*60 = U1= 0 ABOVE 30000 MARKET =R*50=A1= 0 PEOPLE REACHED BY PAPER AD.. UNDER 30000 MARKET = P*80 = U2= 0 ABOVE 30000 MARKET =P*30=A2= 0 TOTAL REACHED

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