The marketing manager for Mountain Mist soda needs to decide how many TV spots a
ID: 396798 • Letter: T
Question
The marketing manager for Mountain Mist soda needs to decide how many TV spots and magazine ads to run during the next quarter. Each TV spot costs $5000 and is expected to increase sales by 300,000 cans. Each magazine ad costs $2000 and is expected to increase sales by 500,000 cans. A total of $100,000 may be spent on TV and magazine ads; however, Mountain Mist wants to speno no more than $70,000 on TV spots and no more than $50,000 on magazine ads. Mountain Mist earns a profit of $0.05 on each can it sells. Which of the following is the objective function, in words? Select one: a. A total of $100,000 may be spent on TV and magazine ads O b. Minimize the amount spent on TV spots and magazine ads O c. Maximize the profit from the sale of soda cans O d. Each magazine is expected to increase sales by 500,000 cans e. Each TV spot is expected to increase sales by 300,000 cansExplanation / Answer
Objective function is maximizing the profit.
Profit = Revenue - Cost
= Max (0.05*300,000 - 5000) T + (0.05 * 500,000 - 2000).
Hence the correct option is c. Maximize the profit from the sale of the soda cans.
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