An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin

Exercise 13

GreenLawns provides a lawn fertilizer and weed control service. The company is adding a special aeration treatment as a low-cost extra service option, which it hopes will help attract new customers. Management is planning to promote this new service in two media: radio and direct-mail advertising. A media budget of $3000 is available for this promotional campaign. Based on past experience in promoting its other services, GreenLawns obtained the following estimate of the relationship between sales and the amount spent on promotion in these two media:
Where
GreenLawns would like to develop a promotional strategy subject to the restriction provided by the media budget.
a. What is the value of sales if $2000 is spent on radio advertising and $1000 is spent on direct-mail advertising?
b. Formulate an optimization problem that can be solved to maximize sales subject to the media budget.
c. Determine the optimal amount to spend on radio and direct-mail advertising. How much money will be generated in sales?