Allocating sales rep time case

Assignment Help Operation Management
Reference no: EM132201964

Allocating Sales Rep Time Case

Efficient Computing Systems (ECU) sells two product groups: System I and System II. The average price of a System I is $400K, while the average price of a System II is $120K. Potential customers are identified by screening a market research data base to identify good prospects. Formal sales calls, i.e., sales presentations, are then made to those with the highest potential to purchase. ECS’s marketing planners divide its potential customers into two types, single-site and multi-site. Sales reps report that a single-site sales presentation requires an average of two days of sales rep time counting preparation and a multi-site presentation requires four days of sales rep time counting preparation.   [A sales presentation can result in a sale of a System I or a System II or possibly both at either type of site.] Over the past two years, 5500 single-site presentations have been made nationwide, and 4500 multi-site presentations have been made by a sales force of 75 sales reps, with the following sales results.

Systems Sales for Two Years     

System I System II

Single Site Customers    110    660

Multi-site Customers 360 450

The System I product line reported a total contribution margin of $29 Million and the System II line reported $33.3 Million for the two year period. For the coming year, ECS plans to hire an additional 25 sales reps and set quotas at 300 System I's and 700 System II's nationwide.

1. Set up a spreadsheet that determines the unit profitability for each system and the number of units sold per sales call of each type for the previous two years. Use this as a starting point for formulating the decision problem for next year.

2. What simplifications and/or assumptions need to be made in projecting the results from the previous two years to next year? What important considerations may be left out?

3. Formulate a linear program for maximizing next year’s projected contribution margin by defining the decision variables, objective function and constraints. Run it in Excel.

4. Interpret your solution in a short write-up. Include a graph of the Total Profit Contribution versus the number of Sales Reps for the range 100 to 300 Reps.   

5. Discuss the managerial insights that are obtained from this analysis. [Hint: LP Answers are 4333   single site and 2667 multi-site calls for 100 Sales Reps]

Reference no: EM132201964

Questions Cloud

Are innovation-creativity and sustainability related : Are innovation, creativity, and sustainability related? Explain. Can one of these factors thrive in an organization without the other two? Why or why not?
What is anticonsumption : What is anticonsumption? How important is market access to a consumer and how might it be limited?
Describe the operating characteristics of HIM profession : Explain and Describe the operating characteristics of a HIM profession. Are you required to have certification(s)? Explain why or why not.
What is hedonic consumption : What is hedonic consumption? What are utilitarian needs? What are the different kinds of relationships that a consumer might engage in with a product?
Allocating sales rep time case : Efficient Computing Systems (ECU) sells two product groups: System I and System II. Discuss the managerial insights that are obtained from this analysis.
Perform a suitable hypothesis test : BUS708 Statistics and Data Analysis - Statistical Modelling Assignment - Perform a suitable hypothesis test at a 5% level of significance to test
Businesses can think outside the box : What are some ways that businesses can think "outside the box"?
How can the company overcome this resistance : Should the company go ahead with the move to Mexico or try one more time to work things out in the Oconomo facility?
Which applicant should be hired : What is the average waiting time a workman would spend in the system under each applicant?

Reviews

Write a Review

Operation Management Questions & Answers

  The organization structure

Write an essay on the theme of "The Organization's structure" no less than three pages,

  Explain the best strategic planning and implementation

Explain the BEST strategic planning and implementation/execution you have observed. Discuss fully.

  Different business processes and software applications

List at least six different business processes/ software applications at a hospital and then define/use a BIA analysis criteria to group the above process/apps into different recovery buckets (hot, warm and cold sites)

  Differentiation in an industry serve as a barrier to entry

How does differentiation in an industry serve as a barrier to entry? how does a potential new entrant going to be at a disadvantage.

  Taxes assessed while gordon occupied the property as tenant

Ulysses bought Whiteacre from Gordon but never recorded the deed. Gordon stayed on the property as a tenant for three (3) years. Near the end of the three (3) years, Gordon learned that Ulysses had never recorded the deed. Ultimately, Cheryl and Ulys..

  Customer relations department of atlantic northern airlines

As Manager of the Customer Relations Department of Atlantic Northern Airlines, you must deny the customer’s claim but retain her goodwill using techniques

  Firm that produces car components for m clients

JP Merchant, a firm that produces car components for m clients, has already p warehouses located in Spain to distribute its products.

  Academic definition of the term metric

Discussion #1: Give an academic definition of the term metric (with an in-text citation) and share an example of at least two metrics you are considering for your second MS PowerPoint presentation due at the end of this week.

  Adult entertainment nightclub called silk stockings

Norman Costello and Robert Giordano were members of Silk, LLC, which owned a bar and adult entertainment nightclub called Silk Stockings.

  Summarize the organization corporate social responsibility

A business model and strategic plan in which you add your strategies and tactics to implement and realize your objectives, measures, and targets. Include marketing and information technology strategies and tactics. Explain the ethical issues faced by..

  Explain your chosen job design and organizational design

Prepare a five-page paper in which you explain your chosen job design, organizational design, your recruiting strategy and methods, and your training.

  Describe types of conflict identified in this case

Describe types of conflict identified in this case. Explain conflict management styles evidenced in this case.Propose a conflict resolution strategy to be used.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd