9 PM EDT The Chamber of Commerce periodically sponsors public service seminars a

Question

9 PM EDT The Chamber of Commerce periodically sponsors public service seminars and programs. Currently, promotional plans are under way for this year's program. Advertising alternatives include television radio, and online. Audience estimates, costs, and maximum media usage limitations are as shown: Constraint Television Radio Online Audience per advertisement 100,000 16,000 35,000 Cost per advertisement $1,500 $250 $650 Maximum media usage 10 24 14 To ensure a balanced use of advertising media, radio advertisements must not exceed 50% of the total number of advertisements authorized. In addition, television should account for at least 10% of the total number of advertisements authorized. (a) If the promotional budget is limited to $18,400, how many commercial messages should be run on each medium to maximize total audience contact? No of commercial Advertisement Alternatives messages Television Radio Online What is the allocation of the budget among the three media? 10 Advertisement Alternatives Budget ($) Television Radio Online What is the total audience reached? 21 63 (b) By how much would audience contact increase if an extra 5100 were

Explanation / Answer

Requirement a If promotional budget is limited to $18400 the following commercial massages should be run to maximize the total audience contact Advertisement alternatives No. of commercial massages Television 10 Radio 11 Online 1 The following will be allocation of budget among the three media Advertisement alternatives No. of commercial massages Cost per commercial massage Budget ($) Television 10 1500 15000 Radio 11 250 2750 Online 1 650 650 Total promotional budget 18400 The total audience reached are as follows Advertisement alternatives No. of commercial massages Audience per advertisement Audience reached Television 10 100000 1000000 Radio 11 16000 176000 Online 1 35000 35000 Total audience reached 1211000 Requirement b If extra $100 is allocated to promotional budget the audience will increase by Advertisement alternatives No. of commercial massages Cost per commercial massage Audience reached Audience per advertisement Budget ($) Television 10 100000 1000000 1500 15000 Radio 1 16000 16000 250 250 Online 5 35000 175000 650 3250 1191000 18500 The total audience will increase by     = =1191000-1211000       = -20000 Since by allocating 100 and choosing the media advertisement afterward will decrease the number of audience contact.

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