Independent Rep Company Salesperson I. Rep Pay Company Salesperson
Pay Flat Sales Pay Flat Sales Sales up 10% Pay with Sales up 10%
2] Which sales force should you use in each State? If you use different sales force structures in different States will this have a negative impact on morale? Justify your decision.
3] Use Data Set 2 for this Question.
Period 13 Forecast MAPE Alpha
Exponential Smoothing (just best alpha)
2 Period Moving Average
3 Period Moving Average
Jury of Executive Opinion
Also, give me the sales forecast that you plan to use for period 13 and a brief justification of why you chose that forecast.
4] You have taken a job with Georgia Pacific (GP). Among other things, GP operates very large paper mills that take large amounts of electricity to run. GP is trying to determine if they should open a new plant in Wisconsin or in Alabama. The plant will have a 40 year life and a huge component of total cost is electricity. Given what you know about forecasting, is it worthwhile to spend $50,000 to estimate the expected cost per kilowatt hour in Alabama and Wisconsin for the next 40 years before making a decision on where to build? Or instead, should you just attempt to estimate costs for the next 5 years at a cost of $5,000. Pick one of the two research options and justify your decision.
5] Your company currently pays a 5% straight sales commission. You only sell one product which has a $260 price. Your unit contribution not including sales commissions are $60 per unit. The sales manager must currently pre-approve any price cuts given to customers.
Sometimes the authorization for price cutting is denied by corporate, and the approval process for price cuts can take up to five business days.
Four of the most experienced and successful sales reps visit the national sales manager during a national sales meeting. They explain how deals are lost because requests for a 10% price cut are denied, or the authority is delayed to the point that the sale is lost.
They request that company policy be changed to allow all individual salespeople the authority to cut prices up to 10%. The experienced salespeople also think that if this policy was enacted that total sales would go up by 25%. Assuming that the sales forecast is accurate, should this policy change be granted? Justify your decision.
6] You have decided to set up a small three person inside sales team to work large numbers of leads by mail, email, and phone to identify quality prospects for new business. Once the target is initially qualified by the inside sales force the lead is turned over to the 40 person field sales force which uses geographic territories. Currently (without the inside sales force), a new customer will generate about $50,000 in sales in year one and averages $300,000 in sales for the first three years.
Field sales people are paid $50,000 in salary plus a 0.5% commission. Average commission is $55,000. Your initial plan is paying inside sales team members a $40,000 salary. With benefits this will cost $150,000 total for the 3 person inside sales force. Is the proposed compensation plan for the inside sales force a good idea or not? Be sure to justify your choice. If this is not a good plan, you must propose a reasonable alternative.
7] You have a 40 member salesforce based all over the USA. You have two options for a necessary sales training meeting. First, you can have a national face-to-face sales meeting in St. Louis. The average travel cost per salesperson to this meeting is $1,300 and including
travel time, on average the meeting would take two days. Second, you could set up an interactive web conference. It would cost $70,000 to set the interactive meeting up including filtering the responses through intermediaries to avoid chaos and have an orderly and productive meeting. The interactive meeting would take up one day and each sales rep would connect with the internet to participate in the meeting. Salespeople average $3,500 in daily sales and the gross margin on sales is 65%. What is the total cost of each of the two meetings? Which meeting should you schedule?
8] You currently have a six person sales team. They are each paid $42,000 in salary and benefits with a 0,5% sales commission.
Sales last year were $26,400,000. You are considering replacing the salespeople with independent reps who are paid a 2% sales commission. What is the break-even between the two sales force structures? Should you use the six person sales staff or independent reps?
9] Congratulations! After being a successful salesperson for five years in the Northeast Region you have received a promotion to be a sales manager for the Southwest region. The head office has informed you that the Southwest region has failed to hit sales and profit quotas for the last three years and it has 25 salespeople. Internationally, only 10% of sales regions fail to hit quotas. Given all of this information, what specifically should you do in your first three weeks when you arrive in El Paso, Texas to take over as regional sales manager? Be specific and give the sequence of steps you will take as the new sales manager.
10] Grant is, at best, a below average salesperson who has been with your company 8 years. He comes into your office late on a Friday afternoon and accuses Sally of sexually harassing him on the job. Grant claims that Sally keeps asking him out on dates, tells him that "guys with big feet and hands are big everywhere," and sends "inappropriate emails and pictures" to his facebook account.
Grant is pressing you to give him an answer to his situation no later than Monday. Sally has been wit the company for two and a half years and is a rising star. She has a real knack for gaining new accounts and her sales are in the top 10% of sales reps. What, if anything, should you do about Grant's accusation? [Note: you cannot pass this problem to HR or some other party within the company].
11] Your company is thinking of setting up a sales internship program to help with recruiting. Your company usually hires 20 new salespeople annually and about half of those hires are graduating college students. Hiring costs alone average $8,000 per hire. On average, about 60% of new hires are successful enough to still be on the payroll two years later.
Sales interns would go through a 5 week accelerated training course. They would then be given mini districts of small and inactive accounts that are geographically concentrated to work for five weeks. The program would run during summers and 20 interns would be employed annually. If you paid the interns $20 an hour, the hourly cost to the company including minimum government mandated benefits would be $26 per hour. The intern program would also need a supervisor to recruit, train, and manage interns.
The intern supervisor would cost about $42,000 annually.
A second option is providing interns apartment housing costing $500 a month and $1,000 a month for expenses with no direct pay. A third option is providing no financial support. What is the total dollar cost of the paid intern program, the housing/expenses intern program, and the no financial support intern program? Considering everything relevant, which internship program would you launch - or would you not have any internship program? Justify your answer.
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