solution

The Linear Programming problem will use the following instructions. Prior to beginning the exam, use these to create a model (“Living Spreadsheet”) for this problem using all three steps. Once your model is created, remember to test it thoroughly before beginning the exam.

Relax-and-Enjoy Lake Development Corp. is developing a lakeside community at a privately owned lake. The primary market are middle and upper income families. An experienced advertising firm has been engaged that has recommended that only five media outlets be used initially.

	Media
	Daytime TV	Evening TV	Newspaper	Sunday Paper	Radio
# Potential Cust per ad	1,000	2,000	1,500	2,500	300
Cost per ad	$1,500	$3,000	$400	$1,000	$100
Exposure Quality *	65	90	40	60	20

* Exposure Quality is a relative measure of demographics, image, and more
used to represent the potential customer’s responsiveness to the ad.

However, there are limitations on the number of times each month these media can be used. Radio has the greatest availability with 30 spots open. The Sunday newspaper has the least with only 4. The daily newspaper has 25 spots, daytime TV has 15, and evening TV has 10.

The corporation obtained additional financing. This campaign now has a $55,000 budget to reach at least 65,000 customers. Because of this additional funding, the TV station has reduced the cost of an evening TV spot to $2,500. Therefore management has increased the limit on TV spending to $24,000.

1) How many total TV ads are placed?

2)How many potential customers would be reached in this campaign?

3)How much money is spent on this campaign

4)How many radio ads will be placed?