According to the GHM Theory,the Choice Between an In-House Sales

question 25

Multiple Choice

According to the GHM Theory,the choice between an in-house sales force versus independent agents should turn on the relative importance of investments in developing persistent clients by the agent versus list-building activities by the insurance firm.What would GHM thus predict about the sales of whole life versus term life insurance?

• A)Both would be sold by the insurance company's in-house sales force
• B)Whole life would be sold by the insurance company's in-house sales force;term by an independent agent
• C)Whole life would be sold by an independent agent;term by the insurance company's in-house sales force
• D)Both would be sold by an independent agent
• E)An insurance company would try to "buy" the business (whole and term life insurance)of its independent agents

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Definitions:

Machine-Related

Machine-related refers to costs, activities, or operations directly associated with the machinery used in production or manufacturing processes.

Quality Costs

Expenses associated with preventing, detecting, and correcting defective work, including costs of quality control measures and rework.

Direct Material Costs

The costs of raw materials or components that are directly traceable to a finished product.

Prevention Costs

Expenses incurred to prevent or minimize the number of defects in the manufacturing process.