Question

District 1 District 2 District 3 District 4 District 5 (5000) (S000) ($000) (S000) (5000) Sales 16,400 19.000 20.900 27,500 16,800 Cost of Goods Sold 9.840 11.020 12.958 16,500 9.240 Direct Selling Expenses 1,542 2,040 1.850 2,804 1,664 District Accounts Receivable 2,340 2,800 2,900 4,840 2,300 District Inventory 4,000 7,000 6,400 10,500 5,000 Number of Salespeople 16 18 22 24 20 Sales Quota 16,200 19,500 20,500 28,250 16,600 Sales Last Year 15,000 18,500 20,500 27,850 16,400 Industry Sales 52,904 59,376 61,472 91,667 60,000

Answer 1

1.

a

	District 1	District 2	District 3	District 4	District 5
Sales Effectiveness Index
Sales	16,400	19,000	20,900	27,500	16,800
(/) No. of salespeople	16	18	22	24	20
Sales Effectiveness Index	1,025	1,055.55	950	1,145.83	840
Sales growth rate
(A) Sales last year	15,000	18,500	20,500	27,850	16,400
(B) Sales This year	16,400	19,000	20,900	27,500	16,800
(C)Difference (B) -(A)	1,400	1,500	400	(250)	400
(D)= (C/A)*100	9.33%	8.11%	1.95%	(0.89%)	2.44%
Market share
(E) Sales	16,400	19,000	20,900	27,500	16,800
(F) Industry Sales	52,904	59,376	61,472	91,667	60,000
Market share (E/F)*100	31%	32%	34%	30%	28%

c)

	District 1	District 2	District 3	District 4	District 5
Sales quota	16,200	19,500	20,500	28,250	16,600
Budgeted Selling Expenses (10% of sales quota)	1,620	1,950	2,050	2,825	1,660
Actual Selling Expenses	1,542	2,040	1,850	2,804	1,664
Variance	78	(90)	200	21	(4)
Remarks	Under	Over	Under	Under	Over

d) Productivity Analysis

	District 1	District 2	District 3	District 4	District 5
Sales	16,400	19,000	20,900	27,500	16,800
(/) No. of salespeople	16	18	22	24	20
Sales per salesperson	1,025	1,055.55	950	1,145.83	840
Direct Selling Expenses	1,542	2,040	1,850	2,804	1,664
(/) No. of salespeople	16	18	22	24	20
Direct selling expense per sales person	96.375	113.33	84.09	116.83	83.2
Sales	16,400	19,000	20,900	27,500	16,800
Cost of goods sold	9,840	11,020	12,958	16,500	9,240
Direct Selling Expenses	1,542	2,040	1,850	2,804	1,664
Profit Contribution	5,018	5,940	6,042	8,196	5,896
(/) No. of salespeople	16	18	22	24	20
Profit Contribution per salesperson	313.625	330	274.64	341.5	294.8

2. The problems uncovered in the analysis

In sales effectiveness Index, District 5 has the least sales effectiveness.
There is negative sales growth in District 4 with comparison to last year sales.
District 5 has the least market share.
We have over spend in District 2 and District 5 in referenece to selling expenses.
Productivity of salespersons of District 5 is least.
IN District 4 Direct selling expense per sales person is maximum.
Profit Contribution per salesperson is least in District 3.

3. Maximum attention should b given on District 5 by improving the productivity of salesperson and there increasing their market share.