a3_iim.docx - Question 3(15 points The Naturals Cosmetics...

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Question 3 (15 points) The Naturals Cosmetics Co. is considering an Ad Campaign for their new Sulphate Free Shampoo (SFS). They are considering three TV channels for the campaign – Star, Galaxy and Cosmos. The expected exposures on the 3 channels per Rs.1000 spent are 2200, 3000 and 1800 respectively. Creating the ads for the 3 channels costs Rs. 50,000, Rs. 75,000 and Rs. 40000, respectively. The total budget available for the campaign after creating the 3 ads is Rs. 280,000. Management does not want to spend more than 60% of the budget on Galaxy. At least Rs. 60,000 should be allocated to Star and Rs. 50,000 each to Galaxy and Cosmos. Also, the amount allocated to Star should not be more than double the amount allocated to Cosmos. The campaign cannot be judged as successful if the total exposures are under 750,000. Management would like to decide the best allocation of the available advertising budget to the three TV channels in order to maximize total exposures.

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