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Poolvac wants to estimate the impact on the sales (# of units sold) of varying levels of advertising in the two different media (TV and Radio). Therefore, your group has requested Poolvac's research department to collect data of the increases in monthly sales (marginal benefits) from increasing the levels of advertizing on television and radio. The objective is to maximize the effectiveness (measured in total sales) of the monthly advertising budget (constraint), which is $2 million. The cost of TV ad is $4,000 per ad, and the cost of Radio ad is $3,000 per ad.
The following data is provided as requested:
Number of Ads
MBtv
MBradio
1
5,000
4,600
2
4,000
3,700
3
3,800
3,400
4
3,600
3,225
5
2,500
6
3,000
220
Q1. What combination of TV and Radio ad would you recommend to senior manager and why?
Q2. What technique would your group utilize?
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