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Operations Research[Direct Marketing]

Kavya SS Kritika Gupta Kulbhushan Baghel Lokesh Singh Mahtaab KajlaPGP/14/276 PGP /14/277 PGP/14/278 PGP /14/279 PGP/14/280

Submitted by: Group V

8/4/2019 Case Analysis Operations Research Direct Marketing [Download to View Full Presentation]

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Case Facts

Group VI Section EI Indian Institute of Management Kozhikode

List Cost per 1000 ($) Expectedresponse rate(%)

CPAs 85 2

Real estatedevelopers 110 3

Personalinvestors

95 6

Conversion of lead into sales expected to be 1 in 20 Between 10 and 20 percent of mailing should be to CPA No fewer than 10000 pieces to go to real estatedevelopers

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Solution to part 1

Group VI Section EI Indian Institute of Management Kozhikode

Decision Variables: x1: No. of names from CPA list

x2: No. of names from real estate developers listx3: No. of names from Personal Investors list

Minimise Z=(x1*85+x2*110+x3*95)/1000

Subject to: x1/(x1+x2+x3)>= 0.1x1/(x1+x2+x3)=10000.95*(.02*x1+.03*x2+.06*x3)>=250x1,x2,x3>=0

Solver Soln: x1= 1111.12x2=10000x3=0Z= 1194.45

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Solution to part 1

Group VI Section EI Indian Institute of Management Kozhikode

Part 1:

Questions Posed:

1. Size of Mailing List: Mailing to CPA + Mailing to real estatedevelopers + Mailing to Personal investors = 11111.12

2. Names from each list: Value of decision variables for CPAs, RealEstates developers and Personal Investors

3. Cost of List: (No. of CPA names*85 + No. of Real estate developernames*110 + No. of Personal investor names*95)/1000 = 1194.45

4. Expected Number of Response: (0.02*No. of CPA names +

0.03*No. of Real estate developer names + 0.06*No. of Personalinvestor names)*0.95 = 306.11

5. Cost per Lead: Cost of List/Expected no. of responses = 3.9

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Solution to part 1

Group VI Section EI Indian Institute of Management Kozhikode

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Solution to part 2

Group VI Section EI Indian Institute of Management Kozhikode

Minimise Z= .95*(.02*x1+.03*x2+.06*x3)

Subject to: x1/(x1+x2+x3)>= 0.1

x1/(x1+x2+x3)=10000(x1*85+x2*110+x3*95)/1000x1,x2,x3>=0

Solver Soln: x1= 21117.02x2=10000x3=180053.19Z= 10949.26

8/4/2019 Case Analysis Operations Research Direct Marketing [Download to View Full Presentation]

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Solution to part 2

Group VI Section EI Indian Institute of Management Kozhikode

Part 2:

Questions Posed:

1. Size of Mailing List: Mailing to CPA + Mailing to real estatedevelopers + Mailing to Personal investors = 21170.21

2. Names from each list: Value of decision variables for CPAs, RealEstates developers and Personal Investors

3. Cost of List: (No. of CPA names*85 + No. of Real estate developernames*110 + No. of Personal investor names*95)/1000 = 20000

4. Expected Number of Response: (0.02*No. of CPA names +

0.03*No. of Real estate developer names + 0.06*No. of Personalinvestor names)*0.95 = 10949.26

5. Cost per Lead: Cost of List/Expected no. of responses = 1.83

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Solution to part 2

Group VI Section EI Indian Institute of Management Kozhikode

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Thanks!!!

Group VI Section EI Indian Institute of Management Kozhikode