Q: Consider the following spending allocation of the advertising budget: ASI = 60, ASC = 20, AEI = 0, AEC = 115. What is the total net sales increase (in $ millions) corresponding to this budget allocation? Choose the closest value among the ones presented below.
or
Q: Examine the advertising budget’s expenditure distribution as follows: ASC = 20, AEI = 0, AEC = 115, ASI = 60. What is the whole increase in net sales (in millions of dollars) that this budgetary allocation corresponds to? Select the value that is closest to the ones listed below.
- 5.70
- 6.85
- 6.25
- 6.80
- 7.25
Explanation: To determine the total net sales increase based on the given spending allocation, we would generally use a model that links advertising spending to sales, such as a sales response function. This function would have coefficients for each category of spending (ASI, ASC, AEI, AEC) that indicate how much sales increase per unit of spending.
