You are a manager of a Door to Door Vacuum Cleaners, Inc. Each salesperson is pa

Question

You are a manager of a Door to Door Vacuum Cleaners, Inc. Each salesperson is paid a base salary plus a percentage of revenue she or he generates. In addition, each salesperson drives his or her car to and from each sales call and is reimbursed $.40 per mile driven. On average, each sales person drives about 150 miles per day and 240 days per year. As a manager of the Door to Door, how might you restructure the compensation of your sales force to enhance you profits? Are they any potential disadvantages of your plan? Explain?

Explanation / Answer

It might be possible to reduce the expenses on reimbursements by not giving the $0.40 per mile driven. Analyze this proposal using quality methods to compare the benefits of using cars purchased by the company such as histograms, pareto charts, cause and effect diagrams and/or control charts.

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