How to allocate advertising budget to maximize profit, Operation Management

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How to allocate advertising budget to maximize profit

A car dealership needs to determine how to allocate its $20000 advertising budget. They have estimated the expected profit from each dollar (X) spent in four different advertising media as follows:

Medium Expected Profit
Newspaper 100X^0.7
Radio 125X^0.65
TV 180X^0.6
Direct Mail 250X^0.5

If the company wants to spend at least $500 on each medium, how should it allocate its advertising budget to maximize profit?

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Operation Management: How to allocate advertising budget to maximize profit

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Operation Management: How to allocate advertising budget to maximize profit

Reference No:- TGS077985

Have a Question? (oR Write a Review)

Recent Questions Asked Operation Management

Q : Fixed selling and administrative expenses

Q : Determine estimated loss if quality parts are produced

Q : Accelerating ideas to market-aim process

Q : What the balance in allowance for uncollectible accounts

Q : How to allocate advertising budget to maximize profit

Q : Decision model analyzing the alternatives problem

Q : Stamping machine in fabrication department

Q : How much cash should sioux expect to collect

Q : What the amount of interest to be accrued on december 31

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Request for Solution File

Ask an Expert for Answer!!

Operation Management: How to allocate advertising budget to maximize profit

Reference No:- TGS077985

Recent Questions Asked Operation Management

Q : Fixed selling and administrative expenses

Q : Determine estimated loss if quality parts are produced

Q : Accelerating ideas to market-aim process

Q : What the balance in allowance for uncollectible accounts

Q : How to allocate advertising budget to maximize profit

Q : Decision model analyzing the alternatives problem

Q : Stamping machine in fabrication department

Q : How much cash should sioux expect to collect

Q : What the amount of interest to be accrued on december 31

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