# Linear Programming Case Study

Essay by   •  August 4, 2019  •  Case Study  •  643 Words (3 Pages)  •  792 Views

## Essay Preview: Linear Programming Case Study

Report this essay
Page 1 of 3

Linear Programming

INFO562-64

Dr. Nicole Koppel and Professor Teresa Dantzler

By: Vincent Nicastro and Rhonda Sharif

1. Case Synopsis

Street Vibes is a Miami, Florida-based upscale dance club that has hired the advertising firm of Mayer, Mann, and Merlin (MMM) to help its management formulate a marketing plan for the coming season. Street Vibes management has sought MMM’s recommendation concerning how the management team should distribute the advertising budget across the three advertising channels the company uses namely: SiriusXM, Social Media, and Internet Radio. Additionally, Street Vibes management wants MMM consultants to determine the impact a \$25,000 reduction in budgeted advertising funds would have on the marketing plan. The company’s budget for the coming season is \$375,000, but the three advertising channels differ in terms of exposure rating, new customers reached and cost, thus Street Vibes management wants MMM consultant’s help in determining the optimal marketing decisions.

1. Methodology

MMM consultants used linear programming based on the information provided by the management of Street Vibes. The management provided vital information such as the projected exposure rating per ad, new customers per ad and cost per ad from which MMM consultants were able to determine the reliability of the exposure ratings based on the number of ads for each media. The following is the mathematical programming model based on the data provided by management of Street Vibes:

S1- number of SiriusXM advertisements with rating of 100 and 4000 new customers

S2 - number of SiriusXM advertisements with rating of 65 and 1500 new customers

S3- number of Social Media advertisements with rating of 30 and 2000 new customers

S4- number of Social Media advertisements with rating of 20 and 1200 new customers

N1: no. of ads for SiriusXM

N2: no. of ads for Social Media

Constraints:

N1*(S1+S2)≥160000

N2*(S3+S4)≤150000

N3*(S5+S6)≥35000

N1≤20

N2≥2*N1

1. Findings and Conclusions

 Variables Number of Ads Exposure Rating per Ad New Customer per Ad Total Customers Reached Cost per Ad Budget SiriusXM S1 14 100 4000 56000 9000 S2 5 65 1500 7500 \$171,000 19 Social Media S3 20 30 2000 40000 3000 S4 30 20 1200 36000 50 \$150,000 Internet Radio S5 27 15 1000 27000 1,000 S6 27 8 200 5400 54 238 171900 \$54,000

Table 1: Advertising budget of \$375,000

 Variables Number of Ads Exposure Rating per Ad New Customer per Ad Total Customers Reached Cost per Ad Budget SiriusXM S1 14 100 4000 56000 9000 S2 4 65 1500 6000 \$162,000 18 Social Media S3 20 30 2000 40000 3000 S4 30 20 1200 36000 50 \$150,000 Internet Radio S5 27 15 1000 27000 1,000 S6 11 8 200 2200 38 238 167200 \$38,000

...

...