1.

An advertising company wishes to plan its advertising strategy in three

different media – television, radio and magazines. The purpose of
advertising is to reach as large a number of potential customers as possible.
Following data has been obtained from market survey:
Television Radio Magazine I Magazine II

Cost of an advertising per unit Br30,000 Br20,000 Br15,000 Br10,000

No. of potential customers reached per 200,000 600,000 150,000 100,000
unit
No. of female customers reached per 150,000 400,000 70,000 50,000
unit

The company wants to spend no more than br450, 000 on advertising. Following
are the further requirements that must be met:
(i) at least 1million exposures take place among female customers
(ii) advertising on magazines be limited to br150,000
(iii) at least 3 advertising units be bought on magazine I and 2 units on
magazine II and
(iv) the number of advertising units on television and radio should each be
between 5 and 10
Formulate an LPM for the problem

2. A conservative investor has $100,000 to invest. The investor has decided to

use three vehicles for generating income: Municipal bonds, a certificate of
deposit (CD), and a money market account. After reading a financial
newsletter, the investor also has identified several additional restrictions on
the investments:
a. No more than 40 percent of investment should be in bonds
b. The proportion allocated to the money market account will be at least
double the amount in the CD
c. The annual return will be 8% for bonds, 9% for the CD and 7% for the
money market account. Assume that the investor wants to maximize
the total annual return

Then, formulate the LP model for this problem, ignoring any transaction
costs and the potential for different investment