This presentation contains various methods to estimate man power in a sales organization.

2. What if there is no prior
estimation?
BELOW OPTIMUM LESS SALES
ABOVE OPTIMUM EXCESS COST

3. METHODS OF DETERMINATION OF
MANPOWER
Workload Approach
Sales Potential Approach
Incremental Approach

4. Work-load approach
 It is based on the assumption that all sales
personnel should bear equal load of work
For this the management has to calculate the
total amount of work load for the entire
market
It is then divided according to the work
handled by an individual sales person
In this way, the approximate number of
manpower can be determined

5. Illustration
Classify customers
‘x’(large accounts)= 200
‘y’(medium accounts)= 400
‘z’(small accounts)= 1000
Total= 1600 in number

6. Now settle the length of time per sales call and
required call frequency for each class of customers
X= 60 min. with 52calls/year= 52 hrs.
Y= 30 min. with 24calls/year= 12 hrs.
Z= 15 min. with 12calls/year= 3hrs.
Now total workload can be calculated as follows-
52 x 200 = 10400
12 x 400 = 4800
3 x 1000 = 3000
TOTAL= 18,200

7. Now if the company decides 40 hrs. of work per week
for 48 weeks, then total no. of available hrs for the
year would be
40 x 48 = 1920 hrs.
Therefore, total no. of sales person required is
= Total hrs required/Total hrs. available
= 18,200/1920
= 9 sales person approximately

8. Sales potential method
 It is based on the assumption that one sales personnel
unit depends upon the performance of the given
activities in the job description
 The management determines the sales job description
according to the average performance by an average
sales person

9. EXAMPLE
 AVERAGE EXPECTED SALES BY 1
SALESPERSON=100 UNITS
 TARGET SALES VOLUME=10000
 EXPECTED PROPORTION OF OPTIMUM SALES
FORCE WHO QUIT OR UNDERPERFORM=10%=0.10
NO. OF SALESPERSON TO BE RECRUITED
=(10000/100)x(1+0.10)
=110

10. FORMULA
.
N=(S/P)(1 + T)
N= Number of sales personnel unit
S= forecasted sales volume
P= estimated sales productivity of one sales personnel
unit
T = allowance for rate of sales force turnover

11. Incremental Method
 It is the method in determining the sales force size
 It is based on two important information which are-
1. Incremental revenue
2. Incremental cost
When incremental revenue exceeds the incremental
cost, then net profit will increase due to additional
sales personnel

12. EXAMPLE
 COST OF ADDITIONAL UNITS= 10000
 S.P. OF ADDITIONAL UNITS=12000
 COST FOR 1 SALESPERSON=20
MAXIMUM NO. OF SALESPERSON TO BE
RECRUITED
=(12000-10000)/20
=100