Question

PepsiCo sells its soft drinks in approximately 400,000 retail establishments, such as supermarkets, discount stores, and convenience stores. Sales representatives call on each retail account weekly, which means each account is called on by a sales rep 52 times per year. The average length of a sales call is 75 minutes (or 1.25 hours). An average salesperson works 2,000 hours per year (50 weeks per year ´ 40 hours per week), but spends ten hours a week on nonselling activities, such as administrative tasks and travel. How many sales people does PepsiCo need?

Answer 1

Answer: 17,333

Explanation:

Total Retail Establishment = 400,000

No. of Calls per establishment in a year = 52 times

Therefore,

Total Calls to be Made = Total Retail Establishment × No. of Calls per establishment in a year

                                      = 400,000 × 52

                                      = 20,800,000

Average Length of the per Call (In Hours) = 1.25

Total hours required for all Calls = Average Length of the per Call × Total Calls to be Made

                                                      = 1.25 × 20,800,000

                                                      = 26,000,000

Net Salesman Working Hrs for Calling:

= Total Working Hours per Salesman - Time for doing non selling activities

= 2,000 - (50 weeks × 10 hours a week)

= 2,000 - 500

= 1,500

Hence,

$No.\ of\ Sales\ People\ Required=\frac{Total\ Hrs\ required\ for\ all\ Calls}{Net\ Salesman\ Working\ Hrs\ for\ Calling}$

$No.\ of\ Sales\ People\ Required=\frac{26,000,000}{1,500}$

                                                            = 17,333

Therefore, 17,333 sales people Pepsi Co need.