Assignment 2

BUS 336 - Due In Canvas, January 30, 2019

Your overall assignment is designed to learn to translate what you know into excel. As I noted in class
this week, for your assignment, you are required to build solutions for every question from assignment 1
in excel. You will also have to build plots of specific elements. These are noted below. All assignments
are due before the start of your relevant class on Wednesday.

Question 1: Marketing Optimization

Pepsi needs to decide how many TV advertisements or magazine ads to run during the next quarter (Q2)
of 2019. Each TV ad costs $5,000 and is expected to increase sales by 250,000 bottles. Each magazine ad
costs $2000 and is expected to increase sales by 450,000 bottles. Pepsi has a total budget of $100,000 for
advertising (TV and magazine ads), and wants to spend no more than $70,000 on TV spots and $50,000
on magazine ads. Pepsi also earns a profit of $0.05 on each bottle that it sells! Management would like to
ideally maximize the number of total bottles sold.

a) Include a bar graph showing the profit earned for each of the categories of ads
b) Include a bar graph showing the number of ads run in each category (TV and Magazine)

Question 2: Mining Optimization

Goldcorp extracts minerals from ore mined at two different sites in Argentina. Each ton of ore type 1
contains 20% gold, 20% copper, and 15% molybdenum. On the other hand, each ton of ore type 2
contains 30% gold, 25% copper, and 10% molybdenum. Ore type 1 costs $90 per ton, and ore type 2
costs $120 per ton. Goldcorp would like to buy enough ore to extract at least 8 tonnes of gold, 6 tonnes
of copper, and 5 tonnes of molybdenum in the least costly manner.

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 a) Include a bar graph showing the total tonnes of each ore extracted
b) Include a bar graph showing the total cost spent for each ore

Question 3 – Farming Optimization

Farming is big business around the world, and is driven significantly by optimization modelling. Let us
imagine a farm, in California, is 100 acres in total on which the farmers can plant either watermelons or
cantaloupes. Every acre planted with watermelons requires 50 gallons of water per day, and must be
prepared for planting with 20 pounds of fertilizer. On the other hand, every acre planted with
cantaloupes requires 75 gallons of water per day and must be prepared for planting with 15 pounds of
fertilizer. The farmer estimates that it will take 2 hours of labor to harvest each acre planted with
watermelons, and 2.5 hours to harvest each acre planted with cantaloupes. He believes that
watermelons will sell for about $3 each and cantaloupes will sell for about $1 each. Every acre planted
with watermelons is expected to yield 90 salable units while every acre planted with cantaloupes is
expected to yield 300 salable units. The farmer can pump about 6,000 gallons of water per day for
irrigation purposes. He can also buy as much fertilizer as he needs, at a cost of $10 for a 50 pound bag.
Finally, the farmer can hire laborers to harvest the fields at a rate of $5 / hour. If the farmer sells all the
watermelons and cantaloupes he produces, how many acres of each crop should the farmer plant to
maximize profits?

a) Include a bar graph showing the total number of acres planted of each crop
b) Include a bar graph showing the total profit earned for each type of crop planted

Question 4 - Advertising Optimization

Ford is evaluating their marketing plan for sedans, SUV’s, and trucks they produce. A TV ad featuring this
a feature SUV has been produced to support this. The company estimates that each showing of this
advertisement will cost $500,000 and increase sales of SUV’s by 3%, but reduce sales of trucks by 1% and
have no effect on the sales of sedans.

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The company has also prepared a second type of advertisements – print ads. This print ad campaign could
run nationally in newspapers and magazines at a cost of $750,000 per title. It is estimated that each
magazine title the ad runs will increase the sales of sedans, SUV’s, and trust by 2%, 1%, and 4%
respectively. The company would like to increase sales of sedans, SUV’s, and trucks by AT LEAST 3%, 14%
and 4% in the least costly manner.

a) Include a bar graph showing the total number of advertisements run in each category
b) Include a bar graph showing the total cost spent for each category of advertisement