Casestudy3
The Flamingo Grill
Case Report
By: Rebecca Johnson
Executive Report
Background
The Flamingo Grill is an upscale restaurant located in St. Petersburg, Florida. Flamingo’s management team hired advertising firm Haskell & Johnson to recommend how their advertising budget of $279,000 should be allocated across television, radio, and newspaper advertisements.
Objective
Maximize the total exposure rating across all media, while reaching at least 100,000 new customers.
Methodology
A Linear Mathematical Program was created. The program was then entered into Excel, and solved using Excel solver.
Results
Advertising Media
Television
Radio
Newspaper
T1
T2
R1
R2
N1
N2
Recommended Number of Ads
10
5
15
18
20
10
Max Total Exposure Rating
2160
Recommendation
I recommend that The Flamingo Grill uses 15 television ads, 33 radio ads, and 30 newspaper ads.
Rationale
Following this recommendation will maximize the Total Exposure Rating.
Managerial Report
1. Advertising Schedule:
Media
Number of Ads
Budget
Television
15
$150,000
Radio
33
$99,000
Newspaper
30
$30,000
Total
78
$279,000
Total Exposure: 2160
Total New Customers Reached: 127,100
2. The shadow price for the budget constraint is 0.0055. So, if an additional $10,000 were added to the advertising budget, total exposure will increase by 55 points.
3. The recommended solution is not very sensitive to the exposure rating coefficients. For example, there is a huge difference in the new customers reached and number of ads suggested in the part 1 and 4 schedules, but the total exposure does not change as drastically.
4. Advertising Schedule:
Media
Number of Ads
Budget
Television
14
$140,000
Radio
28
$84,000
Newspaper
55
$55,000
Total
97
$279,000
Total Exposure: 2130
Total New Customers Reached: 139,600
5. I would recommend using the advertising schedule from part 4 instead of the original schedule because more new customers would be reached and the exposure would only decrease by 30
Case Report
By: Rebecca Johnson
Executive Report
Background
The Flamingo Grill is an upscale restaurant located in St. Petersburg, Florida. Flamingo’s management team hired advertising firm Haskell & Johnson to recommend how their advertising budget of $279,000 should be allocated across television, radio, and newspaper advertisements.
Objective
Maximize the total exposure rating across all media, while reaching at least 100,000 new customers.
Methodology
A Linear Mathematical Program was created. The program was then entered into Excel, and solved using Excel solver.
Results
Advertising Media
Television
Radio
Newspaper
T1
T2
R1
R2
N1
N2
Recommended Number of Ads
10
5
15
18
20
10
Max Total Exposure Rating
2160
Recommendation
I recommend that The Flamingo Grill uses 15 television ads, 33 radio ads, and 30 newspaper ads.
Rationale
Following this recommendation will maximize the Total Exposure Rating.
Managerial Report
1. Advertising Schedule:
Media
Number of Ads
Budget
Television
15
$150,000
Radio
33
$99,000
Newspaper
30
$30,000
Total
78
$279,000
Total Exposure: 2160
Total New Customers Reached: 127,100
2. The shadow price for the budget constraint is 0.0055. So, if an additional $10,000 were added to the advertising budget, total exposure will increase by 55 points.
3. The recommended solution is not very sensitive to the exposure rating coefficients. For example, there is a huge difference in the new customers reached and number of ads suggested in the part 1 and 4 schedules, but the total exposure does not change as drastically.
4. Advertising Schedule:
Media
Number of Ads
Budget
Television
14
$140,000
Radio
28
$84,000
Newspaper
55
$55,000
Total
97
$279,000
Total Exposure: 2130
Total New Customers Reached: 139,600
5. I would recommend using the advertising schedule from part 4 instead of the original schedule because more new customers would be reached and the exposure would only decrease by 30