13 (Total points of 3 parts below: 15 points): The Alpha corporation markets two products, Alpha Disk Drives and Alpha Anti-Virus software. Currently, it utilizes a product specialized sales force structure. Due to maturing product lines, high sales force cost, and instances of customer irritation with having to talk to two different specialist reps from the same company, Alpha is considering moving to a generalist geographic structure which will lower coverage costs but with some anticipated loss in sales. Your task is to determine the appropriate size and profitability of this geographic sales force based on the following information: (1) Reps works 48 weeks per year, 40 hours per week. Fully-loaded costs of a rep are $125,000. The projected performance under the current product specialized structure and proposed geographic structure is summarized below: (2) Product Specialized Structure (2 separate sales forces) : (i) Alpha Disk Drive Sales Force Size: 50 Face-time for Alpha Disk Drive Force: 20% Alpha Disk Drive Sales: $60 million Alpha Disk Drive gross margin% = 80% (ii) Alpha Anti-Virus Sales Force Size: 50 Face-time for Alpha Anti-Virus Force: 40% Alpha Anti-Virus Sales: $60 million Alpha Anti-Virus gross margin% = 40% Geographic Structure (one rep sells both products) Expected Eace-time: 60% Projected Alpha Disk Drive Sales: $55 million Projected Alpha Anti-Virus Sales: $55 million Note: Face-time' means the fraction of total hours worked that is spent by rep in selling to customers. Hint: The minimum geographic sales force size required is that which allows the same number of total face-time hours as that obtained with the product specialized sales force. That is, to get the geographic sales force size, equate total face-time hours under product specialized structure to face-time hours of geographic structure. a: Based on above information, how many reps are required now for geographic structure? (Write down your calculation supporting your answer.) (8 points) b: How much is the improvement or loss in profits if any from switching from product specialized to geographic structure sales force? (5 points) c. Should the company switch from product specialized to geographic structure at this time? (2 points). 13 (Total points of 3 parts below: 15 points): The Alpha corporation markets two products, Alpha Disk Drives and Alpha Anti-Virus software. Currently, it utilizes a product specialized sales force structure. Due to maturing product lines, high sales force cost, and instances of customer irritation with having to talk to two different specialist reps from the same company, Alpha is considering moving to a generalist geographic structure which will lower coverage costs but with some anticipated loss in sales. Your task is to determine the appropriate size and profitability of this geographic sales force based on the following information: (1) Reps works 48 weeks per year, 40 hours per week. Fully-loaded costs of a rep are $125,000. The projected performance under the current product specialized structure and proposed geographic structure is summarized below: (2) Product Specialized Structure (2 separate sales forces) : (i) Alpha Disk Drive Sales Force Size: 50 Face-time for Alpha Disk Drive Force: 20% Alpha Disk Drive Sales: $60 million Alpha Disk Drive gross margin% = 80% (ii) Alpha Anti-Virus Sales Force Size: 50 Face-time for Alpha Anti-Virus Force: 40% Alpha Anti-Virus Sales: $60 million Alpha Anti-Virus gross margin% = 40% Geographic Structure (one rep sells both products) Expected Eace-time: 60% Projected Alpha Disk Drive Sales: $55 million Projected Alpha Anti-Virus Sales: $55 million Note: Face-time' means the fraction of total hours worked that is spent by rep in selling to customers. Hint: The minimum geographic sales force size required is that which allows the same number of total face-time hours as that obtained with the product specialized sales force. That is, to get the geographic sales force size, equate total face-time hours under product specialized structure to face-time hours of geographic structure. a: Based on above information, how many reps are required now for geographic structure? (Write down your calculation supporting your answer.) (8 points) b: How much is the improvement or loss in profits if any from switching from product specialized to geographic structure sales force? (5 points) c. Should the company switch from product specialized to geographic structure at this time? (2 points)