Uploaded by Mouktar Singh Thakur From IIPM, Chandigarh.

1. FACTS
SELLING CAPACITY:
Class A city: 100 Kg per Outlet
Class B city: 75 Kg per Outlet
Class C city: 50 Kg per Outlet
COSTS:
 Servicing:
40/- per day for servicing of one retail or 40 X 5 = 200/- per outlet locally
**
 Salaries:
Area Manager – 2000/month (24000 per annum)
Sales Supervisor – 1200/month (14400 per annum)
Salesman – 300/month (3600 per annum)
 Advertising: Rs 20 Lakhs
 Distribution: Rs 1/ Kg
2 Area Managers for Bihar
24000 X 2 = 48000 per annum
1 Sales supervisor is need for every 10 salesman
(3600 X 10) + (14400 X 1) = 50400 per annum
REVENUE:
7.5/- per soap of 75 grams

2. FINDINGS
Class A City: 200,000 Kg
100 Kg per Outlets 200,000/100 = 2000 Outlets
Class B City: 80,000 Kg
75 Kg per Outlets 80,000/75 = 1067 Outlets
Class C City: 260,000 Kg
50 Kg per Outlets 260,000/50 = 5200 Outlets
 Total Production: 5,40,000 Kg for 8267 Outlets
 Total Possible Revenue: 5,40,000 X 100 = 5,40,00,000
(1 kg=7.5 X 1000/75=100/-)
 Expenditure =
20,00,000 (Advertising cost) + 540,000 (Distribution Cost) + 2 X 24,000
(2 Area Mgr. yearly salary) + 200 X 8267 (Servicing Cost for Outlets) =
42,41,400
 Marketing Expenditure:
For 10% of turnover i.e., 54,00,000
 54,00,000 – 42,41,400 = 11,58,600
For 15% of turnover i.e., 81,00,000
 81,00,000 – 42,41,400 = 38,58,600
 Total no. 0f Squads the company can afford is
11,58,600/50400 = 23 Approx. to 38,58,600/50400 = 76 Approx.
* 1 Squad = 10 Salesmen and 1 Supervisor.

3. Solutions of the questions:
To minimize the cost we take least possible no. of Squad 23 (i.e., 230
Salesmen and 23 Supervisors) and divide it by total no. of Outlets
8267 / 230 = 36 Outlets (Approx)
So, every Salesmen is ready to manage 36 Outlets than Salesforce is ready for
8,280 Outlets.
Territories:
Class A city = 2000/36 = 5 Squad
Class B city = 1067/36 = 3 Squad
Class C city = 5200/36 = 14 Squad
* Total = 23 Squad for 8267
Cost to Management:
 230 X 3600 + 23 X 14400 = 11,59,200
* Total Management Expenditure = 42,41,400+ 11,59,200 = 54,00,200 which
is 10.0003 % of Total Revenue 5,40,00,000.
Sales Target per Salesman:
Class A city 200,000 Kg / 50 (Salesman) = 4000 kg
Class B city 80,000 Kg / 30 (Salesman) = 267 kg
Class C city 260,000 Kg / 140 (Salesman) = 1587 kg

5. SUBMITTED BY :
MOUKTAR ABDI DJAMA
SA 1