MGSC 395 Final Exam Study Guide

ABC Survey, Inc. (ASI) is a marketing research firm that specializes in evaluating consumer reaction to new products, services and advertising campaigns. A client firm has requested assistance from ABC in ascertaining consumer reaction to a recently marketed product for household use. During meetings with the client, it was agreed that door-to-door personal interviews would be used to obtain information from both households with children and households without children. In addition, it was agreed that both day and evening interviews would be necessary in order to allow for a variety of household work schedules. Specifically, the client’s contract called for ABC to conduct 1000 interviews with the following quota guidelines: 1. At least 400 households with children should be interviewed. 2. At least 400 households without children should be interviewed. 3. The total number of households interviewed during the evening would be at least as great as the number of households interviewed during the day. 4. At least 40% of the interviews for households with children would be conducted during the evening. 5. At least 60% of the interviews for households without children would be conducted during the evening. Since the interviews of households with children take additional interviewer time, and since evening interviewers are paid more than daytime interviewers, the cost of an interview varies with the type of interview. Based on previous research studies, estimates of the interview costs are as follows: Household Day Evening Children $20 $25 No Children $18 $20 What is the household, time-of-day interview plan that will satisfy the contract requirements at a minimum total interviewing cost? EXAMPLE 2: LOGISTICS The C&P Company has two manufacturing plants, one located in Kansas City and another in Louisville. Each month’s production is shipped to regional warehouses, which store the products until the orders are received from customers. The production capacities and the warehouse demands for the coming month are as follows: Plant Capacity Warehouse Demand Kansas City 500 Region I 200 Louisville 400 Region II 250 Region III 300 Transportation costs in dollars per unit shipped are as follows: Plant Warehouses Region I Region II Region III Kansas City 2.1 2.25 3 Louisville 2 2.4 2.8 Develop a transportation schedule that will determine the number of units shipped from each plant to each warehouse so that warehouse demands are satisfied at a minimum total transportation cost. .....................................CONTINUED....................................