CASE PROBLEM

LINEAR PROGRAMMING

Managerial Report
1. The recommended number of television and radio spot announcements

OPTIMAL SOLUTION – SUMMARY REPORT <NONZERO VARIABLES>

Variable Value Cost
1 VAR 1 15.0000 600.0000
2 VAR 2 25.0000 200.0000
Slack Variables
4 CONSTR 2 10.0000 0.0000
6 CONSTR 4 10.0000 0.0000
Objective Function Value = 14000
*based on STORM software

The recommended number of television announcements is 15 while in radio spot

announcements, 25.

2. The relative merits of each advertising medium.

Radio
Advantages
 Radio advertising is the quickest medium of advertising. 
 It is cheaper than other media, it can be aimed at a narrow audience and
can reach people within this audience wherever you go.
 It is alive, animated and quite dramatic. It has a human appeal which is
unparalleled by any other medium.
 The advertisement appears in the midst of an interesting programme.
Therefore, those who listen to the programme also listen to the
advertisement.
Disadvantages
  As visual effects are totally absent, the advertiser cannot expect the
desired impact.
 Non-availability of advertising message for future reference.
 Radio ads are ephemeral. You hear them, and then it is gone. 
 The Radio message is short and people easily forget it.
  There is no possibility of a demonstration and there is less research
information.

Television
Advantages
 TV appeals to both the senses of sound and sight. As a result, it combines
the two to produce a high impact on communication.
  Television provides a wider coverage. These days television is a common
household item.
 Through this medium, products can actually be shown and a
demonstration can be made and explained.
 It gives access to vast audiences, and can raise awareness very quickly
 It provides colour visibility making the message all the more attractive and
impressive.

Disadvatages

 Television advertising is costly and sometimes exaggerating

 Too many advertisements at a time may not give prominence for any one.
 Television causes overexposure of the advertisement thus loosing the cost
effectiveness.
 The airtime has to be brief. Therefore, every relevant information about
the product cannot be given.

3. The news program rating that would be necessary before it would make sense to
increase the number of television spots.

The rating of the news program that is necessary to increase the number of television spot
is 14,600, but the budget is limited to a budget constraint so the value of the news
program rating will stick to 14,000. But based on the analysis, the allowed maximum
number announcements is 40 so that it will still meet the budget of P51, 000. When the
spot on the radio is decreasing, the spot for television will increase at the same time the
budget will also increase.

Medium      
Television (a) 16    
Radio (c) 25    
       
Objective      
Maximize overall rating 14600    
       
Constraints      
a+c 41 >= 30
c 25 <= 25
c 25 >= 16
2400*a+600*c 53400 <= 51000
 Medium      
Television (a) 16    
Radio (c) 24    
       
Objective      
Maximize overall rating 14400    
       
Constraints      
a+c 40 >= 30
c 24 <= 25
c 24 >= 16
2400*a+600*c 52800 <= 51000

SENSITIVITY ANALYSIS OF RIGHT-HAND SIDE VALUES

Allowable Allowable
Constraints Type Current Value
Minimum Maximum
1 CONSTR 1 = 51000.0000 27000.0000 75000.0000
2 CONSTR 2 >= 30.0000 -Infinity 40.0000
3 CONSTR 3 <= 25.0000 17.0000 85.0000
4 CONSTR 4 >= 0.0000 -Infinity 10.0000
*based on STORM software

4. The number of television spots that should be purchased if the news program is rated
highly enough to make increasing the number of television spots advisable.

ABC Computers purchase additional 2 television spots by decreasing the number of radio spots
by 8 if the news program is rated highly enough to make increasing the number of television
spots advisable since it still meet the required advertising budget of P51, 000 and the other
constraints and restrictions.

Medium      
Television (a) 17    
Radio (c) 17    
        
Objective      
Maximize overall rating 13600    
       
Constraints      
a+c 34 >= 30
c 17 <= 25
c 17 >= 17
2400*a+600*c 51000 <= 51000

5. The restrictions placed on the advertising strategy that ABC might want to consider
relaxing or altering.

Based on the given data, ABC Computers should consider altering these restrictions placed on
the advertising strategy to come up with more improve desired results. The company can look up
to different costing systems regarding the set restrictions and improvise the ideas or plans that
may occur if the two restrictions above are changed.

6. The best use of any possible increase in the advertising budget.

The best use of any possible increase in the advertising budget is to expand their advertising
campaign through different social media platforms that is surely worth investing for.

7. Any other information that may help ABC’s president make the advertising strategy
decision.

The internet is no doubt the next marketing frontier and social media advertising is the fastest
growing marketing trend with a reported 9 out of 10 businesses employing some form of a
marketing campaign on social media. Advertising through social media has been shown to
increase brand recognition. The majority of the population is on social media so it will easy to
address the company's desired market. Compared to conventional marketing, social media
marketing does not require a lot of monetary resources that's why, it can maintain to reduce cost
while maximizing profit.