GreenLawns provides a lawn fertilizing and weed control service. The company is
ID: 368170 • Letter: G
Question
GreenLawns provides a lawn fertilizing and weed control service. The company is adding a special aeration treatment as a low-cost extra service option, which it hopes will help attract new customers. Management is planning to promote this new service in two media: radio and direct-mail advertising. A media budget of $6,000 is available for this promotional campaign. Based on past experience in promoting its other services, GreenLawns has obtained the following estimate of the relationship between sales and the amount spent on promotion in these two media: -12M 9RM 16R 34M Where S = total sales in thousands of dollars R = thousands of dollars spent on radio advertising M = thousands of dollars spent on direct-mail advertising GreenLawns would like to develop a promotional strategy that will lead to maximum sales subject to the restriction provided by the media budget. (a) What is the value of sales if $5,000 is spent on radio advertising and $1,000 is spent on direct-mail advertising? 7000 (b) Formulate an optimization problem that can be solved to maximize sales subject to the media budget of spending no more than $6,000 on total advertising 12 M2 + Max RM 16 34 R, M (c) Determine the optimal amount to spend on radio and direct-mail advertising. How much in sales will be generated? Amount spent on radio advertising Amount spent on direct-mail advertising = Total Sales 4000 32000Explanation / Answer
S= -2R2-12M2-9RM+16R+34M
R=$5000, M=$1000
R= 5, M=1 FOR EASY CALICULATION TO SUBSTITUTE IN EQUATION
S= -2*52-12*12-9*5*1+16*5+34*1
S= -2*25-12*1-9*5*1+16*5+34*1
S= -50-12-45+80+34
S= -107+114
S=7
S=7*1000$
S=7000$
C2=13000
WHERE AMOUNT SPEND ON DIRECT MAIL ADVERTISING IS
S=-2*52-12*12-9*5*1+16*5+34*1
THE AMOUNT SPEND ON DIRECT MAIL ADVERTISING IS
= -12*1-9*5*1+34*1
= -12-45+34 =23000$ IF WE CONSIDER ---(9*R*M)
THE OTHER OPTION IS
= -12*1-9*1+34*1 IF WE NOT CONSIDER RADIO EXPENSES AT ALL( 9*M)
=-12-9+34
=13000$
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