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:

Conjunctive Task

A task that requires all group members to contribute for the task to be successfully completed; performance is determined by the least capable member.

Additive Task

A type of group task where the contributions from all members are summed to produce a final outcome.

Compensatory Task

A type of task in group settings where the contributions of all members are combined and averaged, leading to a final outcome based on collective effort.

Discretionary Task

A task or activity that an individual or group has the freedom to decide whether or not to perform, based on their judgment or preference.