A Geographical Sales Organization Would Not Be the Best Structure

question 189

Multiple Choice

A geographical sales organization would not be the best structure if

• A)a firm were trying to minimize travel time.
• B)a firm were trying to reduce duplication of selling effort.
• C)a firm's products or customers required specialized knowledge.
• D)specific knowledge is required to sell certain types of products.
• E)there is a need to increase the number of salespersons in the salesforce.

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Definitions:

Incremental Costs

Costs that change as a result of a decision to increase or decrease the level of an activity or operation.

Sunk Costs

Costs that have already been incurred and cannot be recovered or altered by future actions, and therefore should not influence current or future business decisions.

Out-of-pocket Cost

Expenses that are paid out directly and result in a financial outlay.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much contributes to covering fixed costs and generating profit.