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Kevin McShane 12/5/06 Homework Presentation 8-10 Pricing and Marketing Strategy Problem Kruger Paint & Wallpaper Objective – Maximize Sale of Rolls X1 = Advertising Costs X2 = Indoor Display Costs X3 = Wallpaper Inventory X4 = Percent of Markup

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Maximize 20X X2 + 12X3 + (-65,000)X4 Subject to constraints: 1.X1 + X2 + X3 less than or equal to 17,000 2.X1 greater than or equal to X2 greater than or equal to.05X3 X2 -.05X3 greater than or equal to 0 4.X4 greater than or equal to.20 5.X4 less than or equal to.45

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a)X1X2X3X4 RHSDual Maximize Constraint 11110<= Constraint 21000>=30000 Constraint >= Constraint 40001>= Constraint 50001<=0.450 b) Solution-> ,000. c) The difficulty with the answer is that there are no values for X2 and X3? d) Additional constraint could be that they each have a minimal value.

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