Question
John Smith is a regional sales representative for Snappy Tools, Inc., and sells hand tools to auto mechanics in New England states. Smiths goal is
John Smith is a regional sales representative for Snappy Tools, Inc., and sells hand tools to auto mechanics in New England states. Smith’s goal is to maximize total monthly commission income, which is figured at 10% of gross sales. In reviewing experience over the past year, Smith found the following relations between days spent in each state and weekly sales generated.
1. Construct a table showing Smith’s marginal sales per day in each state. |
2. If Smith is limited to 7 selling days per week, how should they be spent? |
3. Calculate Smith’s maximum weekly commission income. |
Days | Vermont Sales | New Hampshire Sales | Maine Sales |
0 | $ 3,000 | $ 3,000 | $1,900 |
1 | 10,000 | 7,000 | 5,200 |
2 | 15,000 | 10,600 | 7,400 |
3 | 19,000 | 13,800 | 8,600 |
4 | 22,000 | 16,600 | 9,200 |
5 | 24,000 | 19,000 | 9,600 |
6 | 25,000 | 21,000 | 9,800 |
Step by Step Solution
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Managerial Economics
Authors: Mark Hirschey
12th edition
9780324584844, 324588860, 324584849, 978-0324588866
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