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Use This Information to Answer the Following Questions That Refer

question 173

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Use this information to answer the following questions that refer to the CPI case
Conservo Products, Inc. (CPI) , with annual sales of $200 million, is a well-known producer of a variety of paper products, almost all of which are made from recycled materials. Picnic plates account for about 70 percent of CPI's sales. The rest of the firm's sales comes from custom-designed materials--such as box liners and spacers, small boxes, and disposable products--like trays, towels and napkins.
CPI's picnic plates are sold through "sales reps" to grocery wholesalers and retail grocery chains. The sales reps are paid a 5 percent commission on all sales in their assigned territories. They usually handle related--but noncompeting--lines for several other manufacturers. Along with their selling duties, the sales reps help CPI with local advertising and sales promotion efforts. Orders for the custom products are obtained by area managers who are paid a straight salary to call on business and institutional customers. The area managers are trained paper specialists and often help their customers design the products they order.
The picnic plates are priced to give CPI a 90 percent markup on the cost of producing the product--with the cost figured by taking the total factory cost for the previous year and dividing that total cost by the number of units produced and sold during that period. The firm's invoices read "F.O.B.--Delivered" and "1/10, net 30." Customers are allowed to deduct 3 percent from the face value of the invoice for buying plates in carload quantities, and another 2 percent for advertising them locally.
The custom products are sold "F.O.B. mill"--with CPI offering a price for each job. Competition is strong from many other manufacturers who are able to offer very similar products which meet the customers' specifications.
CPI forecasts that sales will increase to $250 million by 1999. However, much of this growth is tied to picnic plates--a market in which the firm has about a 7 percent market share and faces aggressive price competition from many smaller firms with greater brand familiarity. Further, CPI has been late with more than 50 percent of its plate orders due to scheduling conflicts with orders for custom products.
-Sure Foot's "field reps" are:

Identify and differentiate between various incentive systems and their application to employee recognition and reward.

Recognize the challenges associated with attendance incentive plans and their effects on workforce behavior.

Perceive employee perceptions of merit raises and their implications on worker morale and performance evaluation.

Compare and contrast piece rates and commissions, understanding their application and effectiveness in motivating employees.

Definitions:

Current Liabilities

short-term financial obligations that are due within one year or within the normal business cycle.

Intangible Assets

Non-physical assets possessed by a company, such as patents, trademarks, and copyrights, that are expected to generate economic benefits.

Financial Information

Data pertaining to the financial status and operations of an entity, including income statements, balance sheets, and cash flow statements.

Net Profit Margin Ratio

A financial metric that calculates the percentage of net income generated from net sales.