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Question 3 Supreme Ventures Limited is a major gambling company in the Caribbean. Last year Supreme Ventures had budgeted up to $8,000 per week for local advertising. The money was allocated among four promotional media: tv spots, newspaper ads, and two types of radio advertisements. Supreme Ventures goal is to reach the largest possible high-potential audience through the various media at the lowest cost possible. The following table presents the number of potential gamblers reached by making use of an advertisement in each of the four media. It also provides the cost per r advertisement placed and the maximum number of ads that can be purchased per week. Medium |Audience Reached Maximum Ads per Week Cost per Ad 5,000 Daily newspaper (full-page ad) 8500 Radio spot (30 sec, primetime) 2400 2800 per Ad S TV spot (1 min) 800 12 925 5 290 25 Radio spot (1min afternoon) 380 20 Supreme Ventures contractual arrangements require that at least 5 radio spots be placed each week. In addition, the firm wants to reach at least 67,000 persons through all media. a) Formulate a linear programming model that would determine the optimal solution. An explanation for the derivation of EACH equation should be provided. b) Set up the initial simplex table. Ensure that you explain the steps taken. c) Use the simplex method to solve the LP. Ensure that you explain the steps taken.

Question 3 Supreme Ventures Limited is a major gambling company in the Caribbean. Last year Supreme Ventures had budgeted up to $8,000 per week for local advertising. The money was allocated among four promotional media: tv spots, newspaper ads, and two types of radio advertisements. Supreme Ventures goal is to reach the largest possible high-potential audience through the various media at the lowest cost possible. The following table presents the number of potential gamblers reached by making use of an advertisement in each of the four media. It also provides the cost per r advertisement placed and the maximum number of ads that can be purchased per week. Medium |Audience Reached Maximum Ads per Week Cost per Ad 5,000 Daily newspaper (full-page ad) 8500 Radio spot (30 sec, primetime) 2400 2800 per Ad S TV spot (1 min) 800 12 925 5 290 25 Radio spot (1min afternoon) 380 20 Supreme Ventures contractual arrangements require that at least 5 radio spots be placed each week. In addition, the firm wants to reach at least 67,000 persons through all media. a) Formulate a linear programming model that would determine the optimal solution. An explanation for the derivation of EACH equation should be provided. b) Set up the initial simplex table. Ensure that you explain the steps taken. c) Use the simplex method to solve the LP. Ensure that you explain the steps taken.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question 3 Supreme Ventures Limited is a major gambling company in the Caribbean. Last year Supreme Ventures had budgeted up to $8,000 per week for local advertising. The money was allocated among four promotional media: tv spots, newspaper ads, and two types of radio advertisements. Supreme Ventures goal is to reach the largest possible high-potential audience through the various media at the lowest cost possible. The following table presents the number of potential gamblers reached by making use of an advertisement in each of the four media. It also provides the cost per advertisement placed and the maximum number of ads that can be purchased per week. Medium Audience Reached Cost Maximum Ads per Ad per Ad $ per Week TV spot (1 min) Daily newspaper (full-page ad) 8500 Radio spot (30 sec, primetime) 2400 Radio spot (Imin afternoon) 5,000 800 12 925 5 290 25 2800 380 20 Supreme Ventures contractual arrangements require that at least 5 radio spots be placed each week. In addition, the firm wants to reach at least 67,000 persons through all media. a) Formulate a linear programming model that would determine the optimal solution. An explanation for the derivation of EACH equation should be provided. b) Set up the initial simplex table. Ensure that you explain the steps taken. c) Use the simplex method to solve the LP. Ensure that you explain the steps taken.
Transcribed Image Text:Question 3 Supreme Ventures Limited is a major gambling company in the Caribbean. Last year Supreme Ventures had budgeted up to $8,000 per week for local advertising. The money was allocated among four promotional media: tv spots, newspaper ads, and two types of radio advertisements. Supreme Ventures goal is to reach the largest possible high-potential audience through the various media at the lowest cost possible. The following table presents the number of potential gamblers reached by making use of an advertisement in each of the four media. It also provides the cost per advertisement placed and the maximum number of ads that can be purchased per week. Medium Audience Reached Cost Maximum Ads per Ad per Ad $ per Week TV spot (1 min) Daily newspaper (full-page ad) 8500 Radio spot (30 sec, primetime) 2400 Radio spot (Imin afternoon) 5,000 800 12 925 5 290 25 2800 380 20 Supreme Ventures contractual arrangements require that at least 5 radio spots be placed each week. In addition, the firm wants to reach at least 67,000 persons through all media. a) Formulate a linear programming model that would determine the optimal solution. An explanation for the derivation of EACH equation should be provided. b) Set up the initial simplex table. Ensure that you explain the steps taken. c) Use the simplex method to solve the LP. Ensure that you explain the steps taken.
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