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Smarmy Sales, Inc. ( SSI ) sells herbal remedies through its Web site and through phone reps. Over the past six years, SSI has started
Smarmy Sales, Inc. SSI sells herbal remedies through its Web site and through phone reps. Over the past six years, SSI has started to depend more and more on its Web site to generate sales.
The figures below show total sales, phone rep costs, and Web site costs for the past six years:
YEAR TOTAL SALES PHONE REP COSTS WEB SITE COSTS
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
a Calculate productivity for the phone reps for each of the past six years. Interpret the results.
b Calculate the productivity for the Web site for each of the past six years. Interpret the results.
c Compare your results in parts a and b What are the limitations of these singlefactor productivity measures?
d Now calculate a multifactor productivity score for each year, where the input is the total amount spent on both the phone reps and the Web site. Interpret the results. What can you conclude?
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