1 / 2

Optimal Advertising Strategy for Wooden Box Sales

Calculate the profit after advertising for Wooden-Box Inc. based on an optimal advertising expenditure model. The company sells wooden boxes with a unit contribution of $5 per box. The market research function predicts sales, with the formula Q = 1,500A^0.44, where Q is quantity sold and A is advertising expenditure. Determine the marketing profit by optimizing the advertising spending.

dior
Download Presentation

Optimal Advertising Strategy for Wooden Box Sales

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Optimal Advertising

  2. Wooden-Box Inc. makes wooden boxes and sells them at a price that provides a unit contribution, (P-V)= $5 per box. The market research department has estimated the function that predicts the number of boxes that are sold because of the advertising. The number of boxes sold due to the size of the advertising expenditure can be estimated by the function • Q = 1,500A0.44 • where Q = quantity sold • A = the amount of money spent on advertising • If the optimal amount of advertising is spent, then what is the profit after advertising (aka marketing profit)?

More Related