Limited Resources (LO4)

Maria Pajet, a regional sales representative for UniTec Systems, Inc., has been working about 80 hours per week calling on a total of 123 regular customers each month. Because of family and health considerations, she has decided to reduce her hours to a maximum of 160 per month. Unfortunately, this cutback will require Maria to turn away some of her regular customers or, at least, serve them less frequently than once a month. Maria has developed the following information to assist her in determining how to best allocate time:

Customer Classification Large Smali-

Business Business Individual Numberoficustomersss.........--... 8 35 80 Average monthly sales per customer.... $2,500 $1,500 $600 Commission percentage ...........-. 5% 8% 10%

Hours per customer per monthly visit . . . 5.0 3.0 P28)

Required

a. Develop a monthly plan that indicates the number of customers Maria should call on in each classification to maximize her monthly sales commissions.

b. Determine the monthly commissions Maria will earn if she implements this plan.

c. Give one or two reasons why Maria might decide not to follow the conclusions of the above analysis entirely?