Decision Analysis

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DECISION ANALYSIS ASSIGNMENT 1

Case Problem 1: Planning Advertising Campaign

EXCEL sensitivity report for the Flamingo Grill case problem:

Managerial Report
Question 1:
Data given for Flamingo Grill case problem:
Total budget = $279000
Advertising media| Exposure rating per ad| New customers per ad| Cost per ad ($)| HJ consultant limit application to| Television| 90| 4000| 10000| 10|
Radio| 25| 2000| 3000| 15|
Newspaper| 10| 1000| 1000| 20|

After consideration of limit for each advertising media:
Advertising media| Exposure rating per ad| New customers per ad| Cost per ad ($)| Television| 55| 1500| 10000|
Radio| 20| 1200| 3000|
Newspaper| 5| 800| 1000|

Model:
Decision variables:
Advertising media| Num of campaigns for max effectiveness| Num of campaigns for reduced effectiveness| TOTAL| Television| 10| 5| 15|
Radio| 15| 18| 33|
Newspaper| 20| 10| 30|
TOTAL| 45| 33| |

TOTAL EXPOSURE = 2160
TOTAL NUMBER OF POTENTIAL NEW CUSTOMERS = 127100
Constraints:
* Must reach at least 100000 new customers
127100 ≥ 100000
* Total campaign slots for maximum effectiveness smaller or same with limit Television: 10 ≤ 10
Radio: 15 ≤ 15
Newspaper: 20 ≤ 20
* At least twice as many radio ads as television ads
33 ≥ 30
* Use not more than 20 television ads
Television: 15 ≤ 20
* Television budget should be at least $140000
$150000 ≥ $140000
* Radio advertising budget is restricted to a maximum of $99000 $99000 ≤ $99000
* Newspaper budget is to be at least $30000
$30000 ≥ $30000
* Overall advertising budget is restricted to a maximum of $279000 $279000 ≤ $279000

Question 2:
If additional $10000 is added to the advertising budget, the total exposure will increase by 55 units as additional television campaign can be allocated.

Question 3:

The ranges indicate that if the allowable increase and decrease is within a very small range, the...
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