QUESTION

# Where is the answer in excel solver for?

Where is the answer in excel solver for?

English Motors, Ltd. (EML), has developed a new all-wheel-drive sports utility vehicle. As part of

the marketing campaign, EML has developed a video tape sales presentation to send to both

owners of current EML four-wheel-drive vehicles as well as to owners of four-wheel-drive sports

utility vehicles offered by competitors; EML refers to these two target markets as the current

customer market and the new customer market. Individuals who receive the new promotion video

will also receive a coupon for a test drive of the new EML model for one weekend. A key factor in

the success of the new promotion is the response rate, the percentage of individuals who receive

the new promotion and test drive the new model. EML estimates that the response rate for the

current customer market is 25% and the response rate for the new customer market is 20%. For the

customers who test drive the new model the sales rate is the percentage of individuals who make a

purchase. Marketing research studies indicate that the sales rate is 12% for the current customer

market and 20% for the new customer market. The cost for each promotion, excluding the test

drive costs, are \$4 for each promotion sent to the current customer market and \$6 for each

promotion sent to the new customer market. Management has also specified that a minimum of

30,000 current customers should test drive the new model and a minimum of 10,000 new

customers should test drive the new model. In addition, the number of current customers who test

drive the new vehicle must be at least twice the number of new customers who test drive the new

vehicle. If the marketing budget, excluding test drive costs, is \$1,200,000, how many promotions

should be sent to each group of customers in order to maximize total sales?