I NEED A LIST OF ALL OF THE CONSTRAINTS

Case 1 Description - Planning an AdvertisingCampaign

The Flamingo Grill is an upscale restaurant located in St.Petersburg, Florida. To help plan an advertising campaign for thecoming season, Flamingo's management team hired the advertisingfirm of Haskell & Johnson (HJ). The management team requestedHJ's recommendation concerning how the advertising budget should bedistributed across television, radio, and newspaper advertisements.The budget has been set at $279,000.

In a meeting with Flamingo's management team, HJ consultantsprovided the following information about the industry exposureeffectiveness rating per ad, their estimate of the number ofpotential new customers reached per ad, and the cost for eachad.

Advertising Media	Exposure rating per ad	New Customers per ad	Cost per ad
Television	90	4000	10000
Radio	25	2000	3000
Newspaper	10	1000	1000

The exposure rating is viewed as a measure of the value of thead to both existing customers and potential new customers. It is afunction of such things as image, message recall, visual and audioappeal, and so on. As expected, the more expensive televisionadvertisement has the highest exposure effectiveness rating alongwith the greatest potential for reaching new customers.

At this point, the HJ consultants pointed out that the dataconcerning exposure and reach were only applicable to the first fewads in each medium. For television, HJ stated that the exposurerating of 90 and the 4000 new customers reached per ad werereliable for the first 10 television ads. After 10 ads, the benefitis expected to decline. For planning purposes, HJ recommendedreducing the exposure rating to 55 and the estimate of thepotential new customers reached to 1500 for any television adsbeyond 10. For radio ads, the preceding data are reliable up to amaximum of 15 ads. Beyond 15 ads, the exposure rating declines to20 and the number of new customers reached declines to 1200 per ad.Similarly, for newspaper ads, the preceding data are reliable up toa maximum of 20; the exposure rating declines to 5 and thepotential number of new customers reached declines to 800 foradditional ads.

Flamingo's management team accepted maximizing the totalexposure rating, across all media, as the objective of theadvertising campaign. Because of management's concern withattracting new customers, management stated that the advertisingcampaign must reach at least 100,000 new customers. To balance theadvertising campaign and make use of all advertising media,Flamingo's management team also adopted the following guidelines.Use at least twice as many radio advertisements as televisionadvertisements.

• Use no more than 20 television advertisements
• The television budget should be at least $140,000
• The radio advertising budget is restricted to a maximum of$99,000
• The newspaper budget is to be at least $30,000

HJ agreed to work with these guidelines and provide arecommendation as to how the $279,000 advertising budget should beallocated among television, radio, and newspaper advertising.

Now, prepare a managerial report developing a modelthat can be used to determine the advertising budget allocation forthe Flamingo Grill. Include a discussion of the following in yourreport,

1. A schedule showing the recommended number of television,radio, and newspaper advertisements and the budget allocation foreach medium. Show the total exposure and indicate the total numberof potential new customers reached.

2. How would the total exposure change if an additional $10,000were added to the advertising budget?

3. A discussion of the ranges for the objective functioncoefficients. What do the ranges indicate about how sensitive therecommended solution is to HJ's exposure rating coefficients?

4. Independent of Q2, suppose a new marketing research datashows that for radio advertisements beyond 15 ads, the exposurerating declines to 15 (instead of 20 described earlier), and whilefor newspaper advertisement beyond 20 the exposure rating declinesto 7 (instead of 5 described earlier). What would be the campaignplan then, and the resulted total exposure?

5. Independent of Q2-4, suppose that the Flamingo’s managementteam has raised the TV and newspaper minimum budgets to $150,000and $40,000 respectively. What would be the campaign plan then, theresulted total exposure and new customers reached?

6. Independent of Q2-5, after reviewing HJ's recommendation inQ1, the Flamingo's management team asked how the recommendationwould change if the objective of the advertising campaign was tomaximize the number of potential new customers reached. Develop themedia schedule under this objective.

7. Compare the recommendations made from Q1 and Q6. What is yourfinal recommendation for the Flamingo Grill's advertisingcampaign?

Managerial Report – General Format

A managerial report should be prepared and should be easilyunderstood by the general recipients of the report (supervisors,COO, CEO, clients, etc.)

The report should include:

1. An executive summary (a short description of the case,alternatives considered, recommendations based on differentobjectives and a final recommendation)
2. A short description of key assumptions used in the model /analysis
3. Linear programming model defining all decision variables
4. Printouts of the optimal solution obtained by using Excel.Include printouts from various alternatives/objectivesconsidered
5. Narrative discussion explaining the LP model, alternativesconsidered, brief analysis on what if questions Q4 and Q5, whatdetailed analysis you made to come up with the recommendations inQ1 and Q6 and how you compared them to arrive at a finalrecommendation in Q7.

I NEED A LIST OF ALL OF THE CONSTRAINTS!