Essay About Current Outside Sales People And Patnodemkt2105 December 2017Haverwood Case

Haverwood Furniture Co.
Essay Preview: Haverwood Furniture Co.
Report this essay
Matthew BurnsDr. PatnodeMKT2105 December 2017Haverwood Case: Part BSummary        Haverwood Furniture Co. is merging with another furniture company called Lea-Meadows Incorporated. The problem that we are trying to solve is whether or not to keep Lea-Meadows current outside sales people or distribute the work to the inside sales people. The sales staff at Haverwood consists of 10 employees and the sales staff of Lea-Meadows consists of 15 employees. If Haverwood would give their current sales staff the extra work, more sales people would need to be hired.DataBreakeven10 sales people x $70,000 = $700,000 = $130,000(.005x) + $830,000 = .05x$830,000 = .045xX = $18,444,444.44Expected sales = $75 million + $5 million = $80 millionBreakeven AnalysisSince the breakeven is less than the expected sales, this means Haverwood should get rid of Lea-Meadows outside sales people and delegate the workload on their current inside sales people. If Haverwood were to do this, they will need to hire more sales people. We would need to figure out how many more employees it will take to cover the workload. This is based off people making 5-7 calls a year. Increasing Sales ForceNeed Sales people = 1,000 x 7 x 3.5/1,500 = 17 peopleNeed sales people = 1,000 x 5 x 3.5/1,500 = 12 peopleIncreasing in costs = $70,000 x 7 = $490,000Increase in costs = $70,000 x 2 = $140,000ConclusionIn conclusion, Haverwood should hire just 2 new inside sales employees. Their sales employees will continue to only make 5 sales calls a year. If 7 calls were to be made a year this would mean that they would need to hire 7 new employees which would cost too much money.