1a) What\'s the optimal advertising strategv, i.e., how many ads of each type sh

Question

1a) What's the optimal advertising strategv, i.e., how many ads of each type should be run? 1b) What's the total number of exposure quality units from this optimal ad strategy? 1c) What's the total number of potential customers reached from this optimal ad strategy? Answer questions 2-5 using shadow prices and sensitivity analysis information found in the Sensitivity Report after solving the above LP formulation. You don't need to re-solve the model with modified data 2) Would the optimal advertising strategy (i.e., the mix of ads, not the objective function value) of (la) change if the exposure quality units from Daytime TV ads increased from 65 to 85? Yes No How could you predict this based on information available in the (original) Sensitivity Report? 3) Would the optimal advertising strategy (i.e, the mix of ads, not the objective function value) of (la) change if the exposure quality units from Sunday Newspaper ads fell from 60 to 35? Yes No How could you predict this based on information available in the (original) Sensitivity Report? 4) By how many units would the optimal total exposure quality units of (1b) change if the client had required NDI to run a total of at least 11 TV ads instead of 10? How could you predict this based on information available in the (original) Sensitivity Report? 5) By how many units would the optimal total exposure quality units of (1b) change if the client had provided NDI with a budget of $32,000 instead of $30,000? How could you predict this based on information available in the (original) Sensitivity Report?

Explanation / Answer

1b) Total number of exposure quality unit = 10*65 + 25*40 + 2*60 + 30*20 = 650 + 1000 + 120 + 600 = 2370

1c) Total number of potential customers reached = 61500

2) No the change in exposure quality from 65 to 85 for DT will not impact the advertisement strategy. That is because there is not sensitivity attached with constraints related to exposure quality of DT.

3) No the change in exposure quality from 60 to 35 for SN will not impact the advertisement strategy. That is because there is not sensitivity attached with constraints related to exposure quality of SN.

4) The sensitivity report shows that for every increase of one unit of ($G$20 Sum) of TV ad constrain means a shadow price of -25. This means that if we increase the constraint from 10 to 11 for condition 2 then the total exposure quality unit will be impacted by -25. It will drop from 2370 to 2345.

5) Changing the budget from 30000 to 32000 means that the advertisement mix will change. This will provide 2 additional Sunday news units. This in turn will increase the exposure quality unit by 120.

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