Saginaw Refrigeration Company manufactures and sells refrigerator and freezer units for retailers of perishables.The company's sales manager is preparing to determine how big its sales force should bE.Its 2001 forecast includes 100,000 refrigerator units and 55,000 freezer units for a total of $38,750,000.It estimates that a typical member of its sales force could be expected to bring in $1,000,000 in sales in 2001.Its sales force expects to spend 3 hours per day (or 33 percent of their 9-hour day)in face-to-face selling.The remaining six hours will be spent servicing (20 percent),doing paperwork (20 percent)and traveling (27 percent). Each sales rep gets two weeks' vacation and two week of in-home training and meetings per year. Saginaw Refrigeration figures that its 100 best customers should be called on every week (52 times per year)for one-half hour.Its 450 medium-sized customers should be called on twice a month for one half-hour.Its smallest customers (120)need a monthly call of 15 minutes.
-Using the breakdown method,determine the sales force size.

Question

Quizplus · Accepted Answer

Using the breakdown method, the sales force size is determined by multiplying the number of sales territories by the number of salespeople in each territory. 
Assuming there are 3 territories, one can divide the potential market by 3 to get the approximate number of customers per territory. This number is then divided by the average number of customers per salesperson to get the number of salespeople needed per territory. 
For example, if there are 39 salespeople and 3 territories, then there are approximately 13 salespeople per territory. If the average number of customers per salesperson is around 400, then each territory has around 5200 customers. 
13 salespeople x 400 customers per salesperson = 5200 total customers per territory 
3 territories x 5200 total customers per territory = 15,600 total customers 
Therefore, C is the best choice as it fits the breakdown calculation.

Saginaw Refrigeration Company Manufactures and Sells Refrigerator and Freezer Units