A Discount Appliance Company Is Planning to Advertise Extensively Before

question 25

Essay

A discount appliance company is planning to advertise extensively before opening a new store. It has allocated $240,000 for advertising. The objective of the company is to maximize the total number of customers exposed to the firm's ads. Formulate a linear programming problem for the company given the information provide and find the optimal solution.
$\begin{array}{l}\begin{array}{cccc}\text { TYPE OF }&\text {COST PER AD } & \text { CUSTOMERS (1000s) } &\text { MAXIMUM }\\ \text { ADVERTISING}& (\$ 1000 \mathrm{~s})&\text { EXPOSED TO EACH AD}&\text { NUMBER OF ADS}\\ \hline \text { Radio }(\mathrm{R}) & 6 & 20 & 20 \\\text { Television }(\mathrm{T}) & 16 & 40 & 15\end{array}\end{array}$

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Definitions:

Residual Value

Residual value refers to the predicted value of an asset at the conclusion of its lifespan.

Estimated Life

The expected period during which an asset is considered to be useful in operations, affecting depreciation calculations.

Capital Expenditure

Resources deployed by a business to buy, enhance, and manage material assets, including real estate, manufacturing facilities, or devices.

Debit

Amount entered on the left side of an account.