Question

Shannon’s Brewery in Keller, Texas is expanding distribution to a number of cities along the I-35 corridor south from Dallas to the Gulf Coast. Shannon’s typically distributes through large distributors such as Ben E. Keith located in Denton, Texas. However, Shannon Carter, CEO of Shannon’s Brewery, wants to employ a series of missionary sales persons to service restaurants, bars, supermarkets, and liquor stores. Their job will be to promote Shannon’s craft beers to these retailers and encourage them to place orders with Shannon’s normal distributor in that area. Based on research, Shannon Carter has identified an initial 688 retailers that are potential adopters of his beers. He estimates that it will take ten visits per year to acquire and then service each account. Each sales call is expected to take 32 minutes. Assume a 40-hour work week for sales reps and that 50% of each rep's time will be consumed by non-selling tasks and travel time. How many missionary sales reps will Shannon need to hire? (Note: you must convert the time allotted for each sales call from minutes to hours.) Round your answer up to the nearest 1/10 of a rep (in reality, as noted above, you would round to the next whole rep).

Answer 1

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Explanation:

First, we need to determine the amount of time each sales representative can spend on selling each week.

A 40-hour work week is equivalent to 2,400 minutes (40 hours x 60 minutes/hour).

If 50% of each rep's time is consumed by non-selling tasks and travel time, then they have 1,200 minutes (2,400 minutes x 50%) available for selling each week.

Each sales call takes 32 minutes, so a rep can make 75 sales calls per week (1,200 minutes available for selling ÷ 32 minutes per sales call).

It takes 10 visits per year to acquire and service each account, which means a sales rep needs to visit each of the 688 potential adopters 10 times per year, or 6,880 visits in total per year.

Each sales rep can make 75 visits per week, which means they can make 3,900 visits per year (75 visits per week x 52 weeks in a year).

Therefore, Shannon will need to hire 1.76 sales reps (6,880 total visits needed ÷ 3,900 visits per year per sales rep).

Rounding up to the nearest 1/10 of a rep, Shannon should hire 1.8 sales reps.