A User-Oriented Model for Sales Force Size, Product, and Market Allocation Decisions Author(s): Leonard M.

Lodish Source: Journal of Marketing, Vol. 44, No. 3 (Summer, 1980), pp. 70-78 Published by: American Marketing Association Stable URL: http://www.jstor.org/stable/1251113 . Accessed: 27/11/2013 08:30
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M. LEONARD LODISH
A simple-to-understand and easy-to-implement model is force to handle decisions on sales size, product, developed and market allocations. One firm's experience in using the model for tactical allocation decisions and strategic sales force restructuring is described.

MODEL FOR USER-ORIENTED FORCE SALES PRODUCT, SIZE, MARKET ALLOCATIO AND DECISIONS

OST sales managers are concerned with justifying their firm's investment in the sales force. Do their salespeople "pay" for themselves? Do they need more people? Or less? A related decision is how best to allocate this total sales effort to products and various market segments served by the firm. The sales effort allocation to products is typically a negotiated compromise among product managers who compete for sales force attention to their products. This article describes a relatively simple-to-understand macro model which has been used to help management with these decisions. The model builds up to the sales force size decision by considering the sales response, by product, of typical market segment members. Leonard M. Lodish is Professor of Marketing,The Wharton School, Universityof Pennsylvania, Philadelphia.The author acknowledges the help in model formulation and implementation of Terry Overton, Jim Largent, Ruth Smith, and Jan W. Bol. This research was supported by Management Decision Systems, Inc.

PreviousResearchin Sales Force Size Models

Because this model was designed with easy, profitable implementation as its goal, it occupies a middle ground in relation to existing sales force size and product allocation models. Beswick and Cravens (1977) developed a sales force size model based on sales response functions for geographic subareas (typically parts of existing territories). Generally such subareas would not be split between two salespeople. Their model would typically involve much data collection and analysis before running, if the response functions were determined empirically. Attempting to develop subjective response functions for geographic subareas also would be a formidable undertaking. For example, if a firm has 500 salespeople with an average of 10 subareas per territory, subjective estimates of 5,000 different sales response functions would be required. On the other hand, some sales forces are already using subjective sales response estimates of each
Journal of Marketing Vol. 44 (Summer 1980), 70-78.

70 / Journal of Marketing, Summer 1980

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individual account to call effort in order to develop improved call frequency policies. For these firms, a by-product of developing these subjectively estimated account response functions is that they can be used to build up the geographical subarea response functions needed for territory alignment and sales force size decisions (see Lodish 1971, 1974b or Glaze and Weinberg 1978for examples). To utilize these models to evaluate sales force size, without utilizing their primary call frequency or territory alignment benefits, is probably not cost effective.

effort to which market segments, e.g., "If we detail this product to this segment twice as much as formerly, what will be the change in sales, once the new policy has had a chance to take effect?" The dynamics of such changes are a secondary effect and not modeled explicitly. Our model can thus be viewed as an evolution of the Montgomery, Silk, and Zaragoza model to consider market segmentation and sales force size, and to simplify its dynamic treatment. The resulting model is quite general and could be utilized by most sales forces selling more than one product.

PreviousResearchin Sales Force Product Allocation

Two management science models have been built for sales force allocation to products. In the context of developing a general model for sales force allocation, Zoltners and Sinha (1979) have recently developed a model conceptually very similar to this author's. However, their solution procedures described in Sinha and Zoltners (1979) are quite different. Montgomery, Silk, and Zaragoza (1971) have developed "Detailer," a model for allocating selling effort, which was applied in the pharmaceutical industry. The models' decision variable is the proportion of physicians contacted who would be detailed for a particularproduct, once per detailing period (typically a quarter). A detail is part of a sales call discussing a particularproduct. The choice of which particular physicians to call on was left to the salesperson (subject to management guidelines set outside the model). This choice capitalizes on the salesperson's knowledge of his/her territories and allows freedom to manage personal time. The model, as presented, only considers policies of complete coverage (detailing every consumer), half coverage, quarter coverage, and no detailing. The affect of detailing on the consumer is modeled utilizing a nonobservable construct called relative exposure value which is a nonlinear function of the detailingpolicy. Accumulated relative exposures are modeled as an exponentially smoothed average of relative exposures over time. Sales response is then a nonlinearfunction of the accumulatedrelative exposures. This model enables managementto evaluate alternative dynamic policies such as pulsing versus continued detailing. See Hobday and Reah (1977)and Hamelsmith(1973) for uses of "Detailer" with different response functions. Our model takes a different view of management's fundamentalproblems in sales force product allocation. We feel that the primary issue is which products are more (or less) responsive to detailing

The DecisionModel
The decision model has two components. The first, a predictive model, predicts the sales and profit effects of a product allocation-sales force size policy. The second is a search procedure to isolate more profitable policies within constraints imposed by the firm. The Predictive Model This model operates at the level of market segments. These are defined as mutuallyexclusive, collectively exhaustive subgroups of the total possible set of people or firms on which the sales force can call. The model assumes that all members of a segment will respond similarly on the average. The firm has a trade-off in defining segments for use in the model. The more ways management divides its market, the more precise will be the response estimates, but more work will be involved to make the estimates. One of the pharmaceutical firms used a salesperson's priority ranking as one of the segmentation criteria. The salespeople had prioritized physicians in their territory into quartiles based on prescribing behavior toward the firm's product classes. Each quartile was treated as a separate segment. This method of segmentation enables this model to utilize each salesperson's best knowledge of his/her territory,similarto the "Detailer" model. The primary decision variable of the model, denoted MENp is the rate or number of mentions (details) per time period made for product p on a typical member of segment s by an average salesperson (See Montgomery, Silk and Zaragoza 1971) for a discussion of the organizational and managementissues of centralizationassumed in this type of model). A mention is defined very generally as the discussion of a product during a sales call. There is also a trade-off in determiningthe level of detail to use in defining different products for use by the model. In general, we have found that firms feel most comfortable with different products, A User-Oriented Model / 71

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if they have a different sales message. Thus, different sizes or models of a generically similar product or product class would typically be considered as one product by the model. Sales of the product to a segment are assumed to be responsive to the average levels of mentions made to a typical segment member over the time frame considered. All sales response estimates for the model are made as indices with respect to a normal level of yearly sales and a normal product mention policy. These are usually given as the current levels or the current plans for next year. Specifically, denote RI,p (MENpS) as the response change (index) in sales of product p to segment s over a time frame, if average mentions to a typical member of the segment for product p are MENp,s. The time frame used can be varied depending on the planninghorizon utilized by the firm. Five points on the response function are estimated by the firm's managementand smooth curves are fit to interpolate between the points. See Lodish (1971) for details on this fitting procedure. Some of the details of the assumptions necessary for making the estimates and how they were described to management in one application are shown in Appendix A. The applicationutilized a four-year time horizon because management did not change sales force size and product allocations very often. They felt that the time for changes to take effect might be as long as two or three years for some large changes. Most other applications have had only a one-year time horizon and thus only one set of sales response estimates instead of four. Like Montgomery, Silk, and Zaragoza (1971), we also assume there are no cross product sales effects. We differ in that we assume that the same product mention policy will be followed over the total planning horizon. As noted, we do not have the flexibility to model dynamic policies such as pulsing. In order to translate the response indices to sales and profits, they must be multiplied by a "normal" sales level and a gross margin fraction. Let NSALESp, denote normal sales of product p to segment s and let GMp denote the gross margin of product p. For a given size sales force, the objective of the firm is to maximize the gross margin contributed by the sales force over the planning horizon. Maximize:
P s

Constraintson the Decision The sales force is constrained in the above maximization because they have a limited number of total calls available and because they can only make a small number of mentions per average call. Let MENPC, denote the average number of mentions per average call on segment s and CALLSS denote the average number of calls to be made on a typical member of segment s. For some segmentation schemes, the time that a typical member would have to listen to a salesperson may vary, thus the number of product mentions per call may also vary. The number of average mentions for all products on a segment must be limited by the calls made to that segment.
MEN,s < CA LLSs? MENPCs
P

(2)

On an individual call, it is assumed that a product can only be mentioned once, thus:
MENp, 5 CALLS, (3)

The last constraint reflects the total call capacity of the sales force. Let NAs denote the number of accounts in segment s and let NP denote the number of salespeople to be evaluated by the model. Alternative sales force sizes can be considered by just changing the value of NP. Each average salesperson is assumed to be able to make MAXC calls in a period (typically one year). This maximum depends on the typical travel time.
CALLS NA s< MAXC NP
s

(4)

The average incremental costs (both compensation and expenses) per person added to the force can be subtracted from (1) to obtain a net incremental profit due to the sales force of size NP. This can vary as a function of the sales force size being evaluated. The Solution Procedure The solution procedure has three parts. The first involves obtaining a profit response function for different level of calls on different segments. These functions are obtained by solving subproblems for optimal numbers of mentions for a given number of calls for all call levels possible in each segment. This method of solution is identical to the first part of CALLPLAN (see Lodish 1971). This incremental analysis routine is described in Appendix B. Once the response functions for calls on each segment have been determined, the same incremental analysis routine can be used to solve for the

E
p=l

E GMp NSA LESP *RIps (MENP)

s=l

(1)

where P denotes the number of products and S the number of segments. 72 / Journal of Marketing, Summer 1980

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TABLE 1 Interactive Computer Session for a Sample Problem

-- Allocate

For Which Year(s): > 4 For Which Segment(s): > All Maximum No. of Salespeople to Allocate > 135 Allocation of Calls to Specialities, Y1982 No. of Total Marginal Profit Incremental People Per Call Added Profit (000) Step No.
1 196 6.3

Total People
6.3

2
3 4 5 6 7 8 9 10 11 12 13 14

1,959

155
77 75 58 45.8 31.3 25.3 19.0 14.1 9.1 4.6 1.3 -1.4

8.0
6.3 4.1 4.1 22.5 44.0 6.3 8.0 4.1 6.2 4.1 6.2 6.2

3,940
4,708 5,203 5,588 7,228 9,474 9,728 10,746 10,839 10,929 10,960 10,972 10,959

14.3
20.5 24.6 28.8 51.4 95.1 101.3 109.3 113.4 119.6 123.8 129.9 136.1

For Which Step Do You Wish to Report Detailed Allocation? Detailed Report of Allocation, Y1982 95 People Allocated Segment A Product No. of Details
A B C D E F G H J Total I 2 0 4 3 5 0 0 1 1 0 16

> 7

Incremental Profit
768,090 0 595,195 396,537 940,584 0 0 1,195,300 763,790 0 4,659,495

Product
K L M Total

Segment B No. of Details

6 7 1 14

Incremental Profit
597,268 1,772,253 102,723 2,472,243

optimal number of calls to make on each segment within constraint (4) on the total number of possible calls for the whole sales force. The third part of the solution procedure, solving for different numbers of salespeople, just implies that the incremental analysis for this second stage will stop at different numbers of maximum calls which are to be evaluated. Thus, once the first part of the solution procedure is completed and the sales response functions for each segment to number of calls have

been determined, the computer time needed to find the number of necessary calls for each segment for various sales force size levels is extremely small. Also, the profit associated with different numbers of people in the sales force is available quickly. Table 1 shows parts of the trace of an interactive computer session in which the solution procedure for a real problem was run. This problem with four segments and 23 product/segment combinations, took approximately five to 10 seconds of IBM A User-Oriented Model / 73

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370/158 CPU time for stage one of the procedure. Stages two and three together took less than two seconds. The products and segments have been coded to protect confidentialities. Notice that the interactive computer programallows the analyst the freedom to look at the profit and sales consequences of many different sales force size levels and then investigate, in detail, the product/ segment allocation policy that is assumed as part of each level of sales force size.

about how the marketplace reacts to sales effort. In many cases, the managers realize that in order to get as many mentions as they want for pet products or segments, they have to make unreasonable assumptions about how responsive those areas are to sales effort. This is a very useful type of "learning."

One Firm's Implementation Experience

Some details and experiences of one firm's use of the model for decision support should help the reader interested in model implementation. In order to disguise the firm and not change any substantive details, let us assume incorrectly that the firm sells a wide line of package goods through food and drug stores. Implementation of the model was coordinatedby a managementscientist who reported to the corporate director of marketingservices. The model was utilized differently for two different corporate sales force decisions: (1) yearly tactical allocations of the sales force to products and store types (market segments) and (2) strategic decisions involved in changing sales force size and composition. Tactical Allocations to Products and Market Segments Yearly sales response estimates for the tactical allocations were made by the following: * Product managers(estimating for all products except their own); * Group product managers; * Senior marketingmanagersincluding the vice president, marketing; * Market researchers; * Senior sales management, including the vice president, sales; * Seven regional sales managers; and * Two district sales managers. Each person's estimates were first reviewed by the coordinator for internal consistency to make sure that the estimator correctly understood his task. Any problems were discussed with the estimator and estimates were redone. Next, estimates of all the regional and district salespeople were averaged, as were those of the market researchers, the product managers, and the groupproduct managers. Senior marketingand sales management's estimates were not averaged or combined. Allocations were then performed for eight different response assumptions; those of middle sales management, product managementand market

Discussion Implementation
This model has been implemented by three firms, including one that had been using "Detailer." Most of the model's usage has been in sales effort allocation to different products. Because of the very politically sensitive nature of sales force size changes, they are implemented much less frequently than product/ segment allocation. Input for the model is generally decided in the following manner: Sheets like those in Appendix A (with typically only one or two different time horizons) are filled out by all of the decision makers knowledgeable enough about the products and segments in question to make intelligentdecisions. Each person first estimates all of the numbers separately for each product and segment. Then all of the people who have made estimates together view summary statistics, such as the mean and 25% and 75% quartiles of their colleagues answers. The managers then discuss outliers and reasons for making their response estimates. This "modified Delphi" technique (Dalkey 1969)then prescribes that each person reestimate considering colleagues' comments. Sometimes the process will converge to response estimates that all of the decision makers feel are appropriate. In other cases, two or three typical response estimates for different groups of decision makers will be used in the model to test for sensitivity of alternative assumptions on the model's recommendations. When the model results are determined, the decision makers know what caused the model's recommendations. Because of its relative simplicity, the decision makers consider the model to be no more than a giant calculator evaluating alternative policies much more efficiently than they could. Use of the model does not stop the bargaining and negotiating that typically goes on between different management groups who have different priorities in terms of products and market segments. However, the bargainingis done at a different level. Instead of negotiating over the outputs, the managers negotiate over the inputs, i.e., assumptions 74 / Journal of Marketing, Summer 1980

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research, group product management, and five individual senior marketing or sales managers. There was much commonality in the estimates of all people in the relative responsiveness, but not necessarily in the absolute responsiveness, i.e., most groups agreed that product A was more responsive than product B to an increased level of product mentions, but sometimes disagreed on the magnitude of the sales response difference. However, when allocating a fixed size salesperson resource, only the relative differences will affect the allocation. Thus, ratherthan doing Delphi rounds to achieve commonality on the response estimates, the coordinator looked directly for commonality in product/segment allocations based upon those response estimates. For some product/ segments there was a general agreement that more or less sales effort was needed. The coordinator used these allocations to develop a recommendation for a "consensus" acceptable to the estimators. That recommendation, as well as the individual allocations for each of the eight groups, was then presented to the group product managers responsible for an allocation recommendation to senior management. For the past two years, actual sales force allocations have been in the "consensus" direction, but not as pronounced in their changes, i.e., if the consensus increase was 30% in one product's effort, the actual implemented increase might have been 15%.This is typical of a conservative, risk averse approach to management. There is no explicit treatment of risk or uncertainty in these models. The conservative management response was therefore appropriate. Strategic Sales Force Restructuring When the model was used for strategic purposes, the decision makers needed to agree on both relative and absolute sales response estimates because marginal revenue minus marginal costs were being calculated for different sales force sizes and configurations. The problem that prompted the strategic use of the model was an inability of the sales force to call as often on high volume stores as the tactical allocation model (and management) would have liked. Some of the store managers just would not let salespeople in as often as the salespeople would have liked. The strategic question, then, was what would be the sales and profit implications and the sales force size implications if the maximum call constraint on some segments could be alleviated? This could be done by two different salespeople representing different products calling on the same store. Because the separation and enlargement of the

sales force was a highly volatile political issue, only sales management (district, regional, and senior) was involved in parameterizing the model. In this use, two Delphi rounds were required to achieve a response consensus of management. The response estimates were made with both three- and five-year time horizons. The five-year horizon was utilized for most runs, because preliminaryruns of the model showed that effort for new products would almost exhaust the present sales force after three years. The model runs showed that only if the calls per account constraint could be eliminated, would all the products achieve the effort needed to maximize their profits. The average cost per call was increased slightly and the average calls per salesperson decreased slightly to reflect the increase in travel costs and time required if a second sales force were inaugurated. Because many of the assumptions about a second sales force (costs, ability to see retailers, relative effectiveness per call, and administrativefeasibility) were not very certain, the sales managers recommended experimenting with a second force in two regions (out of eight) for two years with the rest of the company as a control. One of the justifications for this experiment (actually more of a national roll out) given to senior managementwas the model runs with input describing the two sales forces. Senior management (having used the model for tactical decisions) viewed the model as adding credibility to the requests of sales management. After one year of the experiment, the model would be updated to reflect experience with the separate sales forces. The model runs would then be used tactically to help adjust the roll out of the second sales force.

Model Discussion
Limitations As described earlier, some trade-offs were made in order to develop a model that could be profitably implemented. The macro model does not take into account detailed phenomena such as pulsing of calls, or combining accounts into geographical areas that are visited on the same trip. Because it takes advantage of economies of scale, the solution procedure employed will not generate optimal solutions for every possible level of sales force size. However, because of the simplifications, management is able to relatively easily generate inputs for the model and consider importantphenomena. The turnaroundtime to investigate alternative assumptions using the model is minimal. A User-Oriented Model / 75

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The neglect of detailed treatment of travel time and costs, and combiningaccounts into geographical areas is not very serious at the macro planning level. Along with compensation, the sales costs per salesperson which is subtracted from (1) includes average travel and entertainmentcosts. The changes in these average costs over the total force as a result of changes in the product/ segment allocation for the same size of sales force will usually be quite minor. If some salesperson's expenses go up, others will go down. Similarly, the maximum average calls per salesperson per period includes an implicit consideration of the average amount of travel time available per salesperson. This maximum calls per salesperson is typically obtained by analyzing past data from salesperson's call reports and averaging the calls actually reported for a time period. For a similar-sized sales force, changes in the product/segment allocation will cause some salespeople's travel time to go up and others to go down. The average number of calls available does not change very much. However, as in the case of the "package goods" markets, if the sales force size is changed significantly, then changes in the travel time and costs may become more pronounced. If the sales force size is decreased significantly, travel time as a fraction of total time and costs per salesperson will typically increase because a smaller number of people are covering the same area. Conversely, a large increase in force size will be associated with smaller travel time and costs per salesperson. The model can be changed to handle this phenomenon by changing MAXC and the costs per salesperson to be functions of the sales force size evaluated. In the majority of applications, this has not been necessary because feasible size changes considered by management have been in ranges where the differences in travel time and costs were not believed to be very different from current averages. The Response Estimates A natural question about this procedure is "how good are the response estimates?" Our best answer is "better than nothing!" This procedure forces management to explicitly consider the sales and profit effects of alternativeproduct/segment effort allocations. The final choice of allocation is made consistently with these assumptions. When available, empirical evidence on response functions can be very useful in aiding management in their estimates. This procedure is preferable to a situation where management makes decisions which may be inconsistent with its assumptions, by using past decisions or rules of thumb as a guide. Because 76 / Journal of Marketing, Summer 1980

many other elements, both externally and internally, can affect sales by segment from year to year it is very difficult to validate statistically these assumptions. However, as discussed below, tracking can possibly help managers to update their intuition about sales response. In contrast to the test versus control situation where Fudge and Lodish (1977) estimated the incremental effect on profitability of salespeople using a planning model similar to this one to help in individual call frequency planning, it is impossible here, except in a controlled experiment, to directly estimate what would have happened had management not used the model. Management of the three firms where the model has been applied have felt the investment in time and money necessary to utilize the model was sufficiently valuable that they have decided to use the model each time new planning and budgeting decisions must be made. Two of the firms have used the model at least two years in a row. During the second year, the first topic of conversation among the managers doing the input is how good were estimates last year of what would happen duringthis year for the detailing policies that were adopted.

AppendixA: AbridgedDescriptionof the Input Requiredfor the Model in One Applicationin the Pharmaceutical Industry
Guidelines for QuestionnaireCompletion What You Are Asked To Do For each pertinent product in our market segments, you will be asked to forecast what would happen to our sales over a four-year period if one of five call policies is followed. How Should You Go About Making Up Forecasts The questionnaire is designed for you to do all forecasts in terms of an index. The starting point for the index is always 100. I have filled the index in for 1979next to the call policy which most closely matches our 1978 policy. For your assistance, I have indicated below each year what the index would be if we kept pace with market growth (i.e., there is no share increase or decrease). I suggest the following system which will facilitate forecasting in a logical fashion with a minimum of effort. 1. Start with the current level, then the zero level, saturationlevel and the other two policy levels. 2. For each level ask yourself two questions:

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TABLE A-1 Product A, Market 1 Estimated MarketShare: Our CurrentShare: 63% Our PrincipalCompetitors X, Y, Z '79 $5,050,000 Zero Level Level 1 (2 Details) Level 2 (4 Details) Level 3 (6 Details) Saturation Level '76 $3,500,000
'77

Growth Rate = 13%/yr. '78 $4,469,150

$3,955,000

'80 $5,707,000 Year 1

'81 $6,449,000 Year 2 Year 3

'82 $7,287,000 Year 4

Sales Sales Sales Sales S ales

= = = =

100

a. If we follow this policy for four years, what will our market share be in the fourth year? b. Starting with 1978's market share, how quickly will it increase or decrease to the ending level? The market shares' increases can then be translated to the indexes. Example: Product A (see Table A-I). Starting with the present call level, one may forecast in view of our present share, following the present call policy of four details would maintain our share at current levels. Therefore, the forecast for level two would be:
1 VYear I YV-ar 3 VYSar YeVar A

The same procedure could be followed for other levels and other products. What Assumptions Should You Make As You Do Your Questionnaire 1. Assume that competitive activity remains at present levels. 2. Assume that the relationship between personal and nonpersonal promotion expenditure levels remains the same. 3. Remember that for many of the markets, only a portion of the business is up for grabs each year.

Year 2 (4 Details)

100

113

128

144

Going next to the zero level, one may conclude that if we eliminated all personal promotion of the product, our share would drop from 63% to 50% at the end of four years. Translated into the index, we would expect the share to drop about 13% so the index for year four would be 115 (i.e., 0.87 x 144). Now that we've forecasted how much the share would decline, the next question is how fast? Will it drop off faster at the beginning, at the end, or will the decline be steady? In this case, one might guess that since most of each year's business is new scripts, each year we would gradually lose about two share points. This would lead to a forecast for level zero of:
Year I 161 Level 0 97 - x 100 63 Year 2 Year 3 Year4 155 128 125(-x \63 144

AppendixB: The Incremental Analysis Routine Applied to This Model

Part 1 of the solution procedure solves the following problem many times for each possible level of calls c for each segment s. Find MENps to maximize:
p

* GM, NSA LES, RI (MEN,,)

p=l

= VAL,(c) subject to:

p

(B1)

MEN,, p=l

c MENPC, c

(B2) (B3)

_< MENps
/59 /57 106 x 113) 116-x 63 \3

VAL (c) is thus the maximum value of profit of having c calls made on segment s. Part 1 is "loosely" solved by incremental analyA User-Oriented Model / 77

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sis. Each RIp , function is approximated by a piecewise linear, concave function RIps which is always above or touching the original function at integer values. See Lodish (1971, p. 30-31) for an illustration and details of the approximation. The incremental analysis routine allocates mentions to each product incrementally using the steps of the RI',s function as its guide. Mentions are first allocated to the product with the highest slope of RIp,, (multiplied by NSALES,p GMp) until the slope changes or until c mentions are allocated for the product p. The incremental slope for this product is then changed to the next slope on the RI' curve. Mentions are again allocated to the product (either the same one or a different one) with highest slope until either the slope changes or a total of c mentions have been allocated for the product. The routine stops when c times the number of mentions meets or exceeds C MENPC,. Note that for large values of c, the incremental analysis also obtains values for part 1 for smaller values of c, thus limiting the computer time for the solution. Part 2 solves the following problem: Find

CALLS, for each segment s to maximize:

s

E
s=1

VALs (CALLSs)

(B4)

Subject to:
s

CALLS

-NAs-MAXC

NP

(B5)

s=l

The solution procedure to part 2 is identical to part 1, except that calls rather than mentions are incrementally added. A cost per call can be subtracted from (B4) if that is needed with no change in methodology. As shown in Lodish (1971), for the levels of calls allocated by the incremental analysis, the solution is optimal. However, because the routine always takes advantage of economies of scale and allocates calls rather than people, the number of people allocated may be slightly over or under the original constraints. If the routine allocates a very different number of people, it is because the economies of scale make it worthwhile, i.e., a segment has increasing returns to manpower additions.

REFERENCES
Beswick, C. A. and D. Cravens (1977), "A Multi-Stage Decision Model for Sales Force Management," Journal of Marketing Research, 14 (May), 135-144. Dalkey, N. C. (1969), The Delphi Method: An Experimental Study of Group Opinion, Santa Monica, CA: Rand, RM-5888 PR (June). Fudge, W. and L. Lodish (1977), "Evaluation of the Effectiveness of a Model Based Salesman's Planning System by Field Experimentation," Interfaces, 8 (November), 97-106. Glaze, T. and C. B. Weinberg (1978), "A Sales Territory Alignment Program and Account Planning System," working paper, Stanford, CA: Stanford University. Hamelsmith, N. (1973), "Diagnostic Models in Management Learning," in Proceedings XX, International Meeting of the Institute of Management Science, E. Shlifer, ed., Tel Aviv, Israel. Hobday, C. F. and G. R. Reah (1977), "Experience in the Development and Application of the Multi-Product Sales Force Allocation Model," in Entscherdungshilfen im Marketing, R. Kohler and H. Zimmerman, eds., Stuttgart: C. E. Poeschel Verlag, 211-232. Lodish, L. M. (1971), "CALLPLAN: An Interactive Salesman's Call Planning System," Management Science, 18 (December), 25-40. (1974), "A Vaguely Right Approach to Sales Force Allocation Decisions," Harvard Business Review, 52 (January-February), 119-124. (1974b), "Sales Territory Alignment to Maximize Profit," Journal of Marketing Research, 12 (February), 30-36. Montgomery, D., A. Silk, and C. Zaragoza (1971), "A Multiple Product Sales Force Allocation Model," Management Science, 18 (December), 3-24. Sinha, P. and A. A. Zoltners (1979), "Integer Programming Model and Algorithmic Evolution: A Case from Sales Resource Allocation," working paper, Evanston, IL: Graduate School of Management, Northwestern University. Zoltners, A. A. and P. Sinha (1979), "Integer Programming Models for Sales Resource Allocation," working paper 78-49, Evanston, IL: Graduate School of Management, Northwestern University.

78 / Journal of Marketing, Summer 1980

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