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.
-Which method does Saginaw Refrigeration use for classifying its customers?

Question

Quizplus · Accepted Answer

Saginaw Refrigeration uses the ABC Rule of Account Classification for classifying its customers. This method involves categorizing customers into three groups based on their contribution to overall revenue or profit, with Group A being the most valuable customers and Group C being the least valuable. This allows Saginaw Refrigeration to focus its sales and marketing efforts on the most important customers and tailor its strategies accordingly.

Saginaw Refrigeration Company Manufactures and Sells Refrigerator and Freezer Units