The advertising manager for Roadside Restaurants,Inc.needs to decide whether to spend this month's budget for advertising on print media,television,or a mixture of the two.Her goal is to minimize the costs associated with reaching her audience.She estimates that the cost per thousand "hits" (readers or viewers)will vary depending upon the success of the new cable television network she plans to use,as follows: For what range of probability that the new cable network will be successful will she select the print media strategy?

Question

The advertising manager for Roadside Restaurants,Inc.needs to decide whether to spend this month's budget for advertising on print media,television,or a mixture of the two.Her goal is to minimize the costs associated with reaching her audience.She estimates that the cost per thousand "hits" (readers or viewers)will vary depending upon the success of the new cable television network she plans to use,as follows:  For what range of probability that the new cable network will be successful will she select the print media strategy?

Quizplus · Accepted Answer

To minimize costs, the advertising manager should choose print media strategy when the cost per thousand hits on cable is higher than print media. This occurs when the success probability of the cable network is less than or equal to 0.4, as shown in the cost table provided. Therefore, the answer is A, 0 - 0.4.

The Advertising Manager for Roadside Restaurants,Inc