Mk 4010- Quiz Problems 3

Mk 4010- Quiz Problems 3 - 1 Mustafa Construction builds...

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1. Mustafa Construction builds premier custom homes. The company reports the following numbers in connection with their salesforce: Salaries $370,000 Fringe Benefits $90,000 Selling expenses $45,000 Selling days 180 Average calls per day (for whole salesforce) 4 Compute Mustafa’s cost per call. ANSWER: Total Sales Cost = $370,000 + $90,000 + $45,000 = $505,000 Total Calls = 180 days per year x 4 calls per day = 720 calls Cost Per Call = $505,000 / 720 = $701.39 2. Marcy will get a trip for two to Hawaii if she books $2 million in sales within the next 6 months . Marcy’s average sales amount is $90,000. Will Marcy make it, given the business in her pipeline right now? Please show your work. Stage Number in Stage Probability of moving to next stage Average time to move to next stage Prospect 200 10% 1 months Qualified Prospect 40 25% 3 months Need Development 16 40% 4 months Closing 8 90% 2 months ANSWER: Total sales in the pipeline would involve all four stages, but the six month time limit means that only the “Need Development” and “Closing” stages will produce sales in time. Need Development to Completion = .40 x .90 =.36 16 in Need Development x 0.36 = 5.76 completions Closing to Completion = 0.90 8 in Closing x 0.90 = 7.20 completions
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