Brett Manages a Sales Force That Sells Laboratory Supplies to Companies

question 120

Multiple Choice

Brett manages a sales force that sells laboratory supplies to companies and university science labs.He wants to implement a reward program for high performance.Any rep whose territory bills over $500,000 in sales will win a trip for two,to a Caribbean Island.Last year the high billing territory made $400,000 in sales.As his outside consultant on the rewards program project,you suggest that he ask around to make certain that this is something the reps would enjoy.Your other advice is:

• A)to make certain the payout threshold is sufficiently high so that very few reps will be able to reach the sales goal.
• B)if after several months into the sales contest it appears that several reps are over halfway to meeting this goal,there may be a need to increase the payout threshold.
• C)monetary rewards are never motivators.
• D)to consider whether the sales reps believe that this reward is attainable.

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Definitions:

Beginning Inventory

The total worth of a company's inventory at the beginning of a financial period.

Purchases

Items bought or acquired by a company for various purposes, primarily for resale in the course of business.

Cost Of Goods Available

The total cost of inventory available for sale during a period, calculated as beginning inventory plus purchases minus ending inventory.

Periodic Inventory System

An accounting method where inventory is physically counted at specific intervals to determine the level of inventory and cost of goods sold.