A small magazine publisher wants to determine the best
combination of two possible magazines to print for the month of July. Backyard
magazine, which he has published for years, is a steady seller. The publisher
wants to make sure he prints at least 400 copies to meet his demand from the
newsstands. Porch is a new venture, and has received the benefit of a great
deal of advance publicity. The publisher is hoping that by positioning it near
Backyard he will pick up some spill over demand from his regular readers. Also,
he is hoping that the advertising campaign will bring in a new type of reader
from a potentially very lucrative market. He wants to print at least 300 copies
of Porch. The cover price for Backyard is $3.50; he is pricing Porch at $4.50,
because of the magazines in this market seem to be able to command a higher
price. The publisher has 50 hours of printing time available for this
production run. He also has 30 hours in the collation department, where the
magazines are actually assembled. Backyard requires 2.5 minutes per copy to
print and 1.8 minutes per copy to collage. Because of its larger size, Porch
will require 3 minutes to print and 2 minutes to collate. The publisher wants
to maximize his revenues1. Answer
the following items concerning the Backyard case:
a. What is
the publisher trying to optimize? Is he trying to maximize or minimize?
b. Write the
objective function to support this analysis.
c. What
inputs do you need to support your analysis?
d. Is there
any extraneous data you have been given that you will not need?
e. What
criteria has the publisher given you to support the analysis?
f. Create a
spreadsheet model that supports your analysis.
g. Look
carefully at your criteria. Surplus time is when you have extra time that is
not being used. Is all of the printing time being used? What about the
collation time? Describe what this may mean to you as the publisher.
Solution: Inputs, criteria, and analysis of a small publishing company