Question: The Whitney Agency Problem. The Whitney Agency has just landed an important client that manufactures electric shavers. The shaver company has allocated an advertising budget of $38,000, and Whitney has decided to focus the budget on magazine advertising.

Preliminary market research studies made my the agency have shown that the desired market for electric shavers is composed of men who are 20 to 45 years of age, who have incomes of $30,000 and up, and who have two or more years of college education. The researchers have decided to weigh these factors as follows:

In researching available magazine reader profiles, three magazines in particular were noted to have the highest percentages of readers in each of the three categories. The magazines were: Esquip, CQ, and Lite Quant.

Because of office politics, media balance and competitor shift, the agency has determined that the maximum number of advertisements that should be placed in each magazine is 36, 40 and 45 respectively. In addition, it has been decided that at least nine (9) advertisements should be placed in Esquip, and at least five (5) should be placed in Lite Quant.

Develop the best use of the advertising budget among the three magazines that will maximize exposure of the product to the most desirable market segments.