Answer Happy

4. Karen Galactic, a sales representative for a large chemical company, gets paid a sales commission, that is, a percentage of her sales. However, she has decided to spend less time traveling. She is going to spend only 160 hours per month with her customers. To do this she will have to give up some of her clients. The following information is from her last full month's sales activities. Number of customers Average sale per customer Commission percentage Average time per customer Cost of traveling to site Corporate Customers(CC) 10 $2,000 5% 4 hours $10 Small Businesses (SB) 50 $1,000 7% 2 hours $10 Professional Partnerships (PP) 80 $500 10% 2.5 hours $10 Required: PP To maximize sale commissions, how many customers of CC, SB an should she retain? 4.1 CC SB PP Karen can hire an associate who can work up to 100 hours a month at $19 per hour (and do exactly the same job as Karen). Karen will have to reimburse the associate for travel costs. 4.2 What is the expected incremental profit or loss if Karen hires the associate?