Question

In: Statistics and Probability

A worker is engaged in the sale of programmed business intelligence and has to choose Among...

A worker is engaged in the sale of programmed business intelligence and has to choose Among the following options:

Monthly base salary of $ 3,000 plus 5% commission on sales made during the month.

Monthly salary of $ 1,500 plus 8% commission on sales made during the month.

Monthly base salary of $ 3,500 plus 2.3% commission on sales made during the month.

10% commission on sales made during the month.

Each programmed business intelligence has a value of $ 5,000.

Solve the case by answering the next questions:

What option would you recommend to this worker?

Why?

Show all the calculations to arrive at your recommendation and also present them in graph.

Solutions

Expert Solution

We create a table to simulate and check the earning under each option which is a function of the number of units sold.

The formulas used are as shown below.

Now on plotting the graph as shown below. We see have the following observation.

If the sales per month are up to 10 units than Option 1 the best.

However, if the sales are greater than more than 10 than option 4 is the best.


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