estimation of manpower in a sales organisation
TRANSCRIPT
METHODS OF DETERMINATION OF MANPOWER
Workload Approach
Sales Potential Approach
Incremental Approach
Work-load approach It is based on the assumption that all sales personnel should bear equal load of workFor this the management has to calculate the total amount of work load for the entire marketIt is then divided according to the work handled by an individual sales personIn this way, the approximate number of manpower can be determined
Illustration
Classify customers
‘x’(large accounts)= 200‘y’(medium accounts)= 400‘z’(small accounts)= 1000
Total= 1600 in number
Now settle the length of time per sales call and required call frequency for each class of customers
X= 60 min. with 52calls/year= 52 hrs.Y= 30 min. with 24calls/year= 12 hrs.Z= 15 min. with 12calls/year= 3hrs.
Now total workload can be calculated as follows-
52 x 200 = 1040012 x 400 = 48003 x 1000 = 3000
TOTAL= 18,200
Now if the company decides 40 hrs. of work per week for 48 weeks, then total no. of available hrs for the year would be
40 x 48 = 1920 hrs.
Therefore, total no. of sales person required is
= Total hrs required/Total hrs. available
= 18,200/1920
= 9 sales person approximately
Sales potential method It is based on the assumption that one sales personnel
unit depends upon the performance of the given activities in the job description
The management determines the sales job description according to the average performance by an average sales person
EXAMPLE AVERAGE EXPECTED SALES BY 1
SALESPERSON=100 UNITS
TARGET SALES VOLUME=10000
EXPECTED PROPORTION OF OPTIMUM SALES FORCE WHO QUIT OR UNDERPERFORM=10%=0.10
NO. OF SALESPERSON TO BE RECRUITED
=(10000/100)x(1+0.10)
=110
FORMULA
.N=(S/P)(1 + T)
N= Number of sales personnel unitS= forecasted sales volumeP= estimated sales productivity of one sales personnel unitT = allowance for rate of sales force turnover
Incremental Method It is the method in determining the sales force size
It is based on two important information which are-
1. Incremental revenue
2. Incremental cost
When incremental revenue exceeds the incremental cost, then net profit will increase due to additional sales personnel
EXAMPLE
COST OF ADDITIONAL UNITS= 10000 S.P. OF ADDITIONAL UNITS=12000 COST FOR 1 SALESPERSON=20
MAXIMUM NO. OF SALESPERSON TO BE RECRUITED
=(12000-10000)/20=100