Reference no: EM13918908
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 at- tract 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 promo- tional 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:
S = -2R2 - 10M2 - 8RM + 18R + 34M
where
S = total sales in thousands of dollars
R = thousands of dollars spent on radio advertising
M = thousands of dollars spent on direct-mail advertising
GreenLawns would like to develop a promotional strategy that will lead to maximum sales 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?
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