American Auto is evaluating its marketing plan for the sedans, SUVs, and trucks the company produces. ATV ad featuring this SUV has been developed. The company estimates each showing of this commercial will cost $500,000 and increase sales of SUVs by 3% but reduce sales of trucks by 1% and have no effect on the sales of sedans. The company also has a print ad campaign developed that it can run in various nationally distributed magazines at a cost of $750,000 per title. It is estimated that each magazine title the ad runs in will increase the sales of sedans, SUVs, and trucks by 2%, 1%, and 4%, respectively. The company desires to increase sales of sedans, SUVs, and trucks by at least 3%, 14%, and 4%, respectively, in the least costly manner.
a. Formulate an LP model for this problem. b. Sketch the feasible region. c. What is the optimal solution?
3