Question

TheRecallComputerCo.hassixterritories,eachrepresentedbyonesalesperson.After extensive planning, the company determines that each territory would be expected to achieve the following percentages of total company sales for 2012:

Territory 1 27% Territory 2 15% Territory 3 18%

Territory 4 12% Territory 5 20% Territory 6 8%

These figures are used as the standard for comparing each sales representative’s actual 2016 sales. The company projected sales for 2016 of $18,500,000. Determine which sales representative’s territory had the best performance by using the performance index, if the actual sales for 2016 in each territory were $5,425,000, $3,205,000, $3,710,000, $2,400,000, $3,900,000, and $2,000,000, respectively, for territories 1–6.

Answer 1

Expected % of total company sales

Territory 1 = 27%

Territory 2 = 15%

Territory 3 = 18%

Territory 4 = 12%

Territory 5 = 20%

Territory 6 = 8%

Total projected sales for 2016 = $18,500,000.

Expected sales for territory 1 for 2016 = 27% of $18,500,000. = $4995000

Expected sales for territory 2 for 2016 = 15% of $18,500,000. = $2775000

Expected sales for territory 3 for 2016 = 18% of $18,500,000. = $3330000

Expected sales for territory 4 for 2016 = 12% of $18,500,000. = $2220000

Expected sales for territory 5 for 2016 = 20% of $18,500,000. = $3700000

Expected sales for territory 6 for 2016 = 8% of $18,500,000 = $1480000

Actual sales for territory 1 for 2016 = $5,425,000

Actual sales for territory 2 for 2016 = $3,205,000

Actual sales for territory 3 for 2016 = $3,710,000

Actual sales for territory 4 for 2016 =$2,400,000

Actual sales for territory 5 for 2016 = $3,900,000

Actual sales for territory 6 for 2016 = $2,000,000

Sales performance for territory 1 = (Actual sales / Expected sales)*100

= (5,425,000 / 4995000)*100 = 108.60

Sales performance for territory 2 = (Actual sales / Expected sales)*100

= (3,205,000 / 2775000)*100 = 115.495

Sales performance for territory 3 = (Actual sales / Expected sales)*100

= (3,710,000 / 3330000 )*100 = 111.41

Sales performance for territory 4 = (Actual sales / Expected sales)*100

= (2,400,000 / 2220000 )*100 = 108.10

Sales performance for territory 5 = (Actual sales / Expected sales)*100

= (3,900,000 / 3700000 )*100 = 105.40

Sales performance for territory 6 = (Actual sales / Expected sales)*100

= (2,000,000 / 1480000)*100 = 135.135

Hence from the values of the sales performance, it can be seen that the sales representative’s of territory 6 had the best performance.