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Lecture 4

Lecture 4 - Part 1.pdf

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Management (MGO)

MGTC74 Analysis forDecision Making Lecture 04 Chapter 4 Applications of LP Part I - - Marketing Example - Media Selection - R&E Lake Dev. Corp. o R&E Lake Dev. Corp. developing lakeside community at private lake. . Primary target include middle and upper middle income families within 100 miles of site. . Employed marketing firm BP&J. r Marketing firm recommended first month's ad be restricted to 5 media. o At end of month, will reevaluate strategybased on the month's result. BP&J collected data on: . # of potential customers reached . cost/ad . max # of times each medium is available . exposure quality rating for each media. TAEtr q.l ArJvt:-ttt't.ttl\,lntllAn,TnRfi.'1*il\r*s${t"i'ilrluit..Ax..{}r}.,HN.r{}}"h.r (:{l llfiv[]htH.t{1'lP{}1r,,\'i('l $umhrr trf \l llarinurrrI Ilrleirliul I ri,rro. I Iixp*rtrt tlu$t$rndr$ C**t {$;}*r l\.,tvritatrlI .$,ds€ri*xiitt*dir Renshsd Adrxrti:cement Ql"Jrits l. lfper.\k,rrth\ .. D.rlfime'l'iInirnt-st:riiurrH1.{ I{XX] l5{H} ffi f:j J. Eyening'fV tjO\r(j,\$,r'Kl.A 2{.x,$.} :1$fi] '!< 9{} Driiyne\\,\piiprrulpr-ci. Is$il 4fl{} 41") {. I/re.l{,rrrri*ciroo,rr,rrl Sundav n*r,:ipugr.rrraFirrrn* :${H} ILlt}{l \-/ fifi l?rpltgecillt.r1i, , 7n,-Sar?rif,.r."rr :.Radicr.$:{}.r.ur.,5 {f 1,.}t. nr,$ Sllu It:{} 3{} :n {i* recislirriLltNilF .- Other info: o There isa budget for $30K for hrst month o At least 10 TV ads must be used,z "u^purgr/ o At least 50K customers reached / . No more than $ 18K spent on TV ads. / . Formulate LP model tohelp BP&J determine a rng41q rglection plan. Marketing Example - Marketing Research - MSI Inc. . MSI specializes in evaluating consumer reaction to new products/services and advertising campaigns. . Client wants MSI to evaluate consumer reaction tonew household product. . MSI will conduct door-to-door interviews from households with/without children. . MSI will conduct day and evening interviews. . Interuiewingg cosss: Household dav everung Children s20 $2s No children $18 $20 Other requiremen ,[email protected] I . MSI must conduct 1000 interviews. A . hrt".,r]il1Gil400 household with children o Interview at least00 household without children J . # interview duringevening at leasas greatasinterviewed during day. \ 4. Total J . At least40o/oof interviews withchildrenmust be conducted in evening. . At least60% of interviews withoutchildren mustbe conducted in evening. ,Ad, e - Financg-El?E{0\- .BorffoliSeeecctono WeelettMutuaallFuunndd " , {-dt''' - VUll!/'tr*O ) h, decidingon investments to make +e* I * ifd : ;;hr=-#;,'il;:;;ffiilsandrargorreturq Jd TABTI4"3 tN\rils1':r1r:);'r'RIIJN1T1H,S t;{}Ri*,t."rri FI-:N$S ;%, '-I*-jTL:AI" }, , tf uuiv- ',*b Fr*.irrt*d X*nfK*t$l* ')-":rJA lnrestrrrrnt tft"i '{"'\ \ Allirntir'{-ilf ?.:1 7 [';rr'lOilc lf.I 'i,, I'lidv"Sre*l {;:.,1 Hirtr,;r*l ?": tlrivsln*rrh*;tt-lt ;t,: Company guidelines: ,{K,frL'- t. Ntiitlrtr$ustr5'*illrr xl***fi*rilr_lg:,inur*i{}ie$5{1.{rff}. :. {i;rv*rnr-rrll*ndrshnulttlear }e;ist l5g,t}r*(il;irrr.!**ut*. -l'ltv.irrvi:ttirFa*il'i* l:i;ll'r-rerunrtlii--*}-rrsk irnerr;a*r*Lrr: *il.#rr, nrrirch*r**{.fr"ri'tt*t*l*rlind*rir3'.*lv*rt.*i**t. o What portfoliorecommendations - investments and amounts should be made forthe $100k? Finance Example - Financial Plannins - Hewlitt Corp. . Established earlyretirementprogram aspartof corporaterestructuri"JO3)-ployees tookearly retirement. Company incurs following obligationover next_fuiears. Beginning year 2 3 4 5 6 7 8 ('000) cash required 430 210 222 231 240 195 225 255 . Cash requirements due atbeginning eachyear. . Corporate treasurermust determinq how much money to setaside todayto meet obligations. . purchase year Company can invest in vlnss accoun otIlt-r.iof5il,i1I Can only bonds in 1. Bond pnce rate(o/o) year tomatuflty 1 $11s0 8.875 5 --!_- 2 1000 5.5 6 1 -l I350 11.75 . Bonds have apar value of /"rtnirw'[email protected] o Rates shown are based on pai valueof bond . placed Any funds not inbonds @, eam 4Vo interest. . Formulate LP model to helpcompany meet requirements with Operations Management Example - Make or Buv Decision -Janders Co. Makes 2 types of calculators,"Financial Manager" and "Technician" Same base use for [email protected] tops different Compotents can be I
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