Sales Compensation

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Technical Sales & Marketing

SIE 415-515

Homework: Sales Compensation

You are the manager of the Sales Department for the Epic Widget Manufacturing Company. The company produces three different types of widgets: small widgets, medium widgets, and large widgets.

The senior management of your company has forecasted sales and has asked you and your sales team to sell the following quantities of products during the upcoming fiscal year:

QTY PRODUCT PRICE PER UNIT

100 Large Widgets $45,000

150 Medium Widgets $35,000

225 Small Widgets $10,000

You must sell these quantities of widgets. Since you are the Sales Manager and not in charge of production, you do not control the production levels of the widgets.

Senior management is willing to spend up to, but not over, 10% of the company’s total sales on sales force compensation. This is the limit of total compensation available that you have to distribute to your sales team.

The sales force professionals in the sales department include:

· 3 Senior Sales Representatives

· 5 Sales Representatives

· 2 Sales Trainees

Assignment: Design a sales compensation plan for your department.

For each type of sales professional include plans for:

· Base salary

· Commission rate (constant, progressive, or regressive) for each type of product

1. Use the “Widgets” Excel spreadsheet from D2L (located just after this Homework assignment in the Content section) to develop a projection of sales numbers and sales compensation figures for each type of sales professional and for each type of product.

2. To complete the assignment, input your values into the blue-colored cells in the Widgets spreadsheet. Purple cells allow for optional entries for progressive or regressive commission plans.

3. The sales projections should satisfy the sales objectives and constraints given above.

4. Optional: you can explain your thinking and justification for your sales compensation plan in your spreadsheet starting in row 34.

5. You are allowed to work in small groups on this assignment, but each student must create their own original spreadsheet and submit it to their D2L dropbox by the due date. If you work in a small group (3 or less), be sure to include the names of the other students in your group when you submit the homework to the dropbox.

Sales Compensation Widgets

SIE 415 Sales Compensation Homework
Large Widgets $45,000 ea (must sell 100)
QTY % Comm. For Tier 1 Projected QTY for Tier 1 % Comm. For Tier 2 Projected QTY for Tier 2 Projected QTY (total) Comm. Large (ea) Comm. Large (total)
3 Senior Sales Representatives 0 $0 $0
5 Sales Representatives 0 $0 $0
2 Sales Trainees 0 $0 $0
0
Medium Widgets $35,000 ea (must sell 150)
QTY % Comm. For Tier 1 Projected QTY for Tier 1 % Comm.for Tier 2 Projected QTY for Tier 2 Projected QTY (total) Comm. Med. (ea) Comm. Med. (total)
3 Senior Sales Representatives 0 $0 $0
5 Sales Representatives 0 $0 $0
2 Sales Trainees 0 $0 $0
0
Small Widgets $10,000 ea (must sell 225)
QTY % Comm. For Tier 1 Projected QTY for Tier 1 % Comm. For Tier 2 Projected QTY for Tier 2 Projected QTY (total) Comm. Small (ea) Comm. Small (total)
3 Senior Sales Representatives 0 $0 $0
5 Sales Representatives 0 $0 $0
2 Sales Trainees 0 $0 $0
0
QTY BASE salary Large Widgets comm. Medium Widgets comm. Small Widgets comm. Total Income Per Rep TOTAL SALES COMP. PAID
3 Senior Sales Representatives $0 $0 $0 $0 $0
5 Sales Representatives $0 $0 $0 $0 $0
2 Sales Trainees $0 $0 $0 $0 $0
$0
TOTAL SALES TOTAL SALES COMP. AVAIL. Blue cells = required; purple cells = optional
$0 $0 Orange cells = check your quantities sold to ensure that you meet the goals

Sheet3

 

Last Updated on April 15, 2020 by Essay Pro