You\'re going to go to a job interview for OU Car Co. Knowing that the field is
ID: 3805157 • Letter: Y
Question
You're going to go to a job interview for OU Car Co. Knowing that the field is highly competitive, you have run sales scenarios ahead of time experimenting with different numbers of customers and vehicle profits given that in one month OU Car Co. sells between 5 and 10 cars uniformly distributed with profits of $5, 000 on the average with standard deviation of $1250. Which has a higher payoff, focusing on selling to a couple more customers or by increasing the average sale (with the same std. dev. of $1250 by retraining your sales force or do they have basically the same effect on total sales? Support your answer.Explanation / Answer
Note: Results for Ptave will vary due to being generated by random numbers.Therefore, results can be in a reasonable range from what is shown here.
Baseline
First, a baseline is established, based upon the above given information.
Pv = Profit per vehicle
Fits Normal distribution with mean of $4000 and a standard deviation of $900
N = Number of vehicles sold
Fits a Uniform distribution with a maximum of 10 and a minimum of 4
Yields Ptave = Average Profit Total = $28,901.00
Case 1: 10.0 % Increase in either Pv or N
Pvmean = $4400 All other inputs remain at baseline input level
Yields Ptave = Average Profit Total = $30.881.86
Nmax = 11 All other inputs remain at baseline input level
Yields Ptave = Average Profit Total = $30,112.84
The increase in Pv yields a resulting Ptave $769.02 higher
than the increase in N.
Case 2: 20.0 % Increase in either Pvmean or Nmax
Pvmean = $4800 All other inputs remain at baseline input level
Yields Ptave = Average Profit Total = $33,686.49
Nmax = 12 All other inputs remain at baseline input level
Yields Ptave = Average Profit Total = $32,095.11
The increase in Pv yields a resulting Ptave $1591.38 higher
than the increase in N..
Case 3: 30.0 % Increase in either Pv or N
Pvmean = $5200 All other inputs remain at baseline input level
Yields Ptave = Average Profit Total = $36,473.37
Nmax = 15 All other inputs remain at baseline input level
Yields Ptave = Average Profit Total = $34,115.03
The increase in Pv yields a resulting Ptave $2358.34 higher
than the increase in N.
In conclusion:
From these scenarios, an increase in either Pv or N will increase Ptave.
However, increasing Pv has a greater impact on the average total profit (Ptave) from the baseline than a similar increase in the number of vehicles sold (N). So from these three cases efforts to increase the average sale (Pv) would be recommended.
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