Smarmy Sales, Inc. (SSI), sells herbal remedies through its Web site and through

Question

Smarmy Sales, Inc. (SSI), sells herbal remedies through its Web site and through phone reps. Over the past six years, SSI has started to depend more and more n its Web site to generate sales. The figures below show total sales, phone rep costs, and Web site costs for the past six years: Calculate the productivity for the phone reps for each of the past six years. Interpret the results. Calculate the productivity for the Web site for each of the past six years. Interpret the results. Compare your results in parts a and b. What are the limitations of these single-factor productivity measures? Now calculate a multifactor productivity score for each year, where the "input" is the total amount spent on both the phone reps and the Web site. Interpret the results. What can you conclude?

Explanation / Answer

Answer: Answer-a Answer-b Year Total Sales Phn Rep cost Web site cost Total Cost Productivity of Phn Rep cost Productivity of web site cost 2008 $4,790,000 $200,000 $50,000 $250,000 0.041753653 0.010438413 2009 $5,750,000 $210,000 $65,000 $275,000 0.036521739 0.011304348 2010 $6,900,000 $221,000 $85,000 $306,000 0.032028986 0.012318841 2011 $8,280,000 $230,000 $110,000 $340,000 0.027777778 0.013285024 2012 $9,930,000 $245,000 $145,000 $390,000 0.024672709 0.014602216 2013 $11,920,000 $255,000 $190,000 $445,000 0.021392617 0.015939597 Answer-c limitations of these single factor produtivity measure is that they just give one dimension exposure.

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