Professional Documents
Culture Documents
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A comprehensive, systematic, diagnostic, and prescriptive tool Purpose - "...to assess the adequacy of a firm's sales management process and to provide direction for improved performance and prescription for needed changes."
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Observations
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Separate sales analyses need to be performed for the different levels in the sales organization Many different types of analyses can be performed to evaluate sales, cost, profitability, and productivity
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Sales managers at each level need sales analyses at their level and the next level below for evaluation and control Taking a top-down perspective from which to analyze a sales organization, a hierarchical sales analysis, provides an useful way to identify problem areas
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Sales Analysis
Type of Sales
Total Sales Type of Product Type of Account Type of Distribution Order Size
Type of Analysis
Comparisons
within organization with forecasts with sales quotas with previous period with industry/ competitors
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Region 2 $55,000,000
Region 3 $45,000,000
Region 4 $60,000,000
District 2 $9,000,000
District 3 $8,500,000
District 4 $5,000,000
District 5 $9,500,000
Territory 2 $900,000
Territory 3 $850,000
Territory 4 $950,000
Territory 6 $800,000
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Selling Budget
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Compensation Expenses Salaries Commissions Bonuses Travel Expenses Lodging Food Transportation Miscellaneous
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Training Costs Actual Cost Budgeted Cost Variance $ 985,000 $1,030,000 -$ 45,000 $2,110,000 $2,040,000 +$ 70,000 $ 830,000 $1,060,000 - $230,000 $2,340,000 $2,160,000 +$180,000 Training Costs Actual % Sales 2.9% 3.1% 2.6% 3.1% Budgeted % Sales 3% 3% 3% 3%
Compensation Costs Region 1 Region 2 Region 3 Region 4 Actual % Sales 6.1% 5.8% 5.4% 6.0% Budgeted % Sales 6% 6% 6% 6%
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Full cost approach - attempts to allocate the shared costs to individual units based on some type of cost allocation procedure Contribution approach - only the direct costs are included in the profitability analysis
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Increasing output with the same level of input Maintaining the same level of output but using less input
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