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Allocating Selling Effort Via Dynamic Programming

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  • Charles A. Beswick

    (University of South Carolina)

Abstract

This article presents a model for allocating selling effort and setting sales force size which explicitly considers interactions with territorial design, forecasting, and performance evaluation. An extremely fast, dynamic programming algorithm for the allocation of selhng time to control units is presented, and a proof of the optimality of this solution under specified conditions is provided. This algorithm also generates the optimum sales force size and provides output which is a basis for designing sales territories. The allocation algorithm can accommodate a large class of multivariate response functions. The model also incorporates subjective judgment into the decision process. Interaction with sales management of a test firm has shown that the model is highly useful in pinpointing problem areas, in evaluating salesmen, and in designing territories which can, to a large degree, achieve the benefits of the optimum allocation generated by the model.

Suggested Citation

  • Charles A. Beswick, 1977. "Allocating Selling Effort Via Dynamic Programming," Management Science, INFORMS, vol. 23(7), pages 667-678, March.
    • Handle: RePEc:inm:ormnsc:v:23:y:1977:i:7:p:667-678
    DOI: 10.1287/mnsc.23.7.667
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    Cited by:

    1. Skiera, Bernd & Albers, Sönke, 1993. "COSTA: ein Entscheidungs-Unterstützungs-System zur deckungsbeitragsmaximalen Einteilung von Verkaufsgebieten," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 324, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    2. Drexl, Andreas & Haase, Knut, 1996. "Fast approximation methods for sales force deployment," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 411, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    3. Jhansson, Mats, 12. "Managing the Sawmill with Product Costs - A Simulation Study," Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics, Scandinavian Society of Forest Economics, issue 40, May.
    4. Olivier Rubel & Ashutosh Prasad, 2016. "Dynamic Incentives in Sales Force Compensation," Marketing Science, INFORMS, vol. 35(4), pages 676-689, July.
    5. Andreas Drexl & Knut Haase, 1999. "Fast Approximation Methods for Sales Force Deployment," Management Science, INFORMS, vol. 45(10), pages 1307-1323, October.

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