1. Homework Presentation 8-10 Pricing and Marketing Strategy Problem
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

2. Maximize 20X X2 + 12X3 + (-65,000)X4
Subject to constraints:
X1 + X2 + X3 less than or equal to 17,000
X1 greater than or equal to 3000
X2 greater than or equal to .05X3
X X3 greater than or equal to 0
X4 greater than or equal to .20
X4 less than or equal to .45

3. a) X1 X2 X3 X4 RHS Dual
Maximize
Constraint <=
Constraint >=
Constraint >=
Constraint >=
Constraint <=
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.