Question

Maria Pajet, a regional sales representative for UniTec Systems Inc. has been working about 80 hours

per week calling on a total of 123 regular customers each month. Because of family and health consider-

ations, she has decided to reduce her hours to a maximum of 160 per month. Unfortunately, this cutback

will require Maria to turn away some of her regular customers or, at least, serve them less frequently than

once a month. Maria has developed the following information to assist her in determining how to best

allocate time:

Customer Classification

Large

Business

Small

Business Individual

Number of customers...................... 8 35 80

Average monthly sales per customer.......... $2,500 $1,500 $600

Commission percentage ................... 5% 8% 10%

Hours per customer per monthly visit ......... 5.0 3.0 2.5

Required

a. Develop a monthly plan that indicates the number of customers Maria should call on in each clas-

sification to maximize her monthly sales commissions.

b. Determine the monthly commissions Maria will earn if she implements this plan.

c. Give one or two reasons why Maria might decide not to follow the conclusions of the above analysis

Answer 1

(a) (b) Statement Showing Monthly plan to indicate No. of Customer maria Should call and commission will earn
S. No.	Particular	Large Business	Small Business	Individual
a	Number of Customers ( in No.)	8	35	80
b	Average monthly sales per customer	$2,500	$1,500	$600
c	Commission percentage	5%	8%	10%
d	Hours per customer per month visit ( in Hour)	5	3	2.5
e=a*b*c	sales commission per month	$1,000	$4,200	$4,800
f=a*d	No. of Hours per month spend	40	105	200
g=e/f	Sales commission earned per hour	$25	$40	$24
	Ranking   to earn sales comission/Hour	II	I	III
h	Allocation of Availble 160 Hours on the basis of Ranking	40	105	15
		(8*5)	(35*3)	(160-105-40)
i=h/d	A)no of customer should call	8	35	6
j=i*b*c	B) Monthly commission based on plan	1000	4200	360

C) Based on above plan individual customer are served last which is having highest customer base (80) and commission percentage (10%) and hence we will lose 74 customers (80-6).