A Company Wants to Determine How to Allocate Its $200,000

question 23

Essay

A company wants to determine how to allocate its $200,000 advertising budget to market a new cereal.The company is considering newspaper ads,television ads,and radio ads.The following table illustrates the cost of advertising in these different media and the exposure to new customers reached by increasing the number of ads in each medium.
$\begin{array}{lccc}\text { Media and Number of Ads } & \text { No. of New Customers reached } & \text { Cost per ad } \\ \text { Newspaper: } 1-5 & 700 & \$ 500 \\\text { Newspaper: } 6-10 & 500 & \$ 400 \\\text { Television: } 1-10 & 9000 & \$ 5000 \\\text { Television: } 11-20 & 7500 & \$ 4000 \\\text { Radio: } 1-10 & 4000 & \$ 2000 \\\text { Radio: } 11-20 & 300 & \$ 1500\end{array}$

Use Excel to formulate and solve this problem to maximize audience exposure.

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Definitions:

Gross Requirement

The total demand for an item or component before considering inventory on hand or scheduled receipts, typically used in production and inventory planning.

Bill Of Material

A complete rundown of essential substances, components, and procedures for constructing, crafting, or restoring a product or service.

Cumulative Lead Time

The total time required to manufacture a product, including the time to procure all necessary materials and components.

Component Y

A hypothetical or specific part of a larger system or machine, typically referred to in the context of manufacturing, assembly, or engineering projects.