140 LO7 E4-26. Limited Resources Maria Pajet, a regional sales for UniTec System

Question

140 LO7 E4-26. Limited Resources Maria Pajet, a regional sales for UniTec Systems Inc. has been working about 80 houn r week calling on a total of 123 regular customers each month. Because of family and health considet ations, she has decided to reduce her hours to a maximum of 160 per month. Un will require Maria to turn away some of her regular customers or, at least, serve them less frequentdy tha once a month. Maria has developed the following info allocate time: MBC y, this cutback to assist her in e. Co P4-28. Multig Customer Classification Business Business Individual 80 35 $1,500 of cust $800 Average monthly sales per customer Commission percentage 5% 5.0. 10% 2.5 8% 3.0 Required a. Develop a monthly plan that indicates the number of c 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 c. Give one or two reasons why Maria might decide not to follow the conclusions of the above analyss entirely

Explanation / Answer

Priority of serving the cusomer is based on the commission earned per hour. hence of the total avaiable hours of 160 first priority customer served in full for 105 hours, then 40 for second prioriy and balance hours for third priority customers maximising her commission amount to 5560.

c.

She may not follow the follow because her priority of serving customers may be different than with the plan shown above. may be in the long term by allocating less hours to individuals may affect her business.

Calculation of commission per hour spent Particulars Large business Small business Individual a Average monthly sale 2500 1500 600 b Commission percentage 5% 8% 10% c=a*b Commission amount 125 120 60 d Number of hours per customer 5 3 2.5 e=c/d Commission per hour 25 40 24 f Number of customer 8 35 80 g=f*d Maximum number of hours required for customers in the segment 40 105 200 h Priority 2 1 3 i Allocation of hours 40 105 15 j=i*e Commission earned 1000 4200 360 Total earnings 5560

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