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Finding the Optimal Number of Advertising Hours

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Problem: "Optimal Input Level."

Ticket Services, Inc., promotes concerts and sporting events. The college uses a team of ten students to hand deliver flyers at the mall, where every hour increment of flyer advertising costs \$130. Over the past year, the following relation between advertising and ticket sales per event has been observed:
Sales (units) = 7,000 + 200A - 0.6A2 and ∆Sales/∆A = 200 - 1.2A

Here A represents one hour of flyer distribution and sales are measured in numbers of tickets.

A. Continuing with Smith's production analogy, what is the marginal product of advertising?
B. Using the rule for optimal resource employment, determines the profit-maximizing number of flyer distribution hours.

Solution Preview

A. Continuing with Smith's production analogy, what is the marginal product of advertising?
Marginal product of ...

Solution Summary

This solution depicts the required steps needed to find the optimal number of advertising hours in the given case.

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Linear Programming - Graphical and Computer Methods - Answer: Problem 6-36, Problem 7-16 & Problem 7-29

6-36 Ralph Janaro simply does not have time to analyze all
of the items in his company's inventory. As a young
manager, he has more important things to do. The
following is a table of six items in inventory along
with the unit cost and the demand in units.
iDENTIFlcxnoN CODE' . UNIT COST (\$) DEMAND IN UNITS
XXI 5.84 1,200
B66 5.40 1,110
3CPO 1.12 896
33CP 74.54 1,104
R2D2 2.00 1,110
RMS 2.08 961
(a) Find the total amount spent on each item during
the year. What is the total investment for all of
these?
(b) Find the percentage of the total investment in
inventory that is spent on each item.
(c) Based on the percentages in part (b), which
item(s) would be classified in categories A, B, and
C using ABC analysis?
(d) Which item(s) should Ralph most carefully control
using quantitative techniques?

7-16 A candidate for mayor in a small to 'In has allocated
" \$40,000 for last-minute advertising in the days preceding
the election. Two types of ads will be used:
reaches an estimated 3,000 people. Each television ad
costs \$500 and reaches an estimated 7,000 people. In
planning the advertising campaign, the campaign
manager would like to reach as many people as pOSSible,
but she has stipulated that at least 10 ads of each