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We consider a firm that sells seasonal goods. The firm seeks to reach a fixed level of goodwill at the end of the selling period, with the minimum total expenditure in promotional activities. We consider the linear optimal control problem faced by the firm which can only control the communication expenditure rate; communication is performed by means of advertising and sales promotion. Goodwill and sales levels are considered as state variables and word-of-mouth effect and saturation aversion are...
We consider a firm
that sells seasonal goods. The firm seeks to reach a fixed level
of goodwill at the end of the selling period, with the minimum
total expenditure in promotional activities. We consider the
linear optimal control problem faced by the firm which can only
control the communication expenditure rate; communication is
performed by means of advertising and sales promotion. Goodwill
and sales levels are considered as state variables and
word-of-mouth effect and saturation aversion are...
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