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Sales Design

LEADING QUESTIONS FOR SALES DESIGN:

  • Which customers , distribution chanels and products generate cash?
  • How can we increase the profitability of our product-mix?
  • Should we grow by new product sales or by developing new markets?
  • How sensitive is our export revenue to forex fluctuations?
  • What should we do if profitable orders in reality prove to be loss makers?

DESIGN SALES TO:

Account for dynamic constraints to balance incompatible targets.

Design resources, processes, variables, parameters and targets completely.

Test performance by simulating targets and constraints.

Use prices, promotions and operating volumes as parametric decision variables.

Adjust customer service level to achieve strategic profitability.

Save time by reducing analysis and decision making time from weeks to hours.

USE PARAMETRIC SALES DESIGN TO MAKE DYNAMIC DECISIONS.

Design different Price, Payment Terms, Discounts and Returns for different customer types and groups that depend on customer’s position in the Distribution Channel and its geographical location.

Determine the customer  types and groups as per Distribution Channel and geographical location.

Vary Payment Terms for special days and sales campaigns.

Differentiate Discounts for Product, Customer and Distribution Channel.

Base Sales Quantity Returns on Product to avoid production quantity miscalculations.

Use Inventory Target Quantity to avoid stock outs.

For the period ending inventory, assign number of days –NOT quantity–the ending inventory is expected to meet the next period’s sales.  For example, “the ending inventory should cover next period’s 40 days of sales.”

If the Inventor Target Quantity is assigned as a quantity but not as a days to meet next period’s sales, the simulation results will show either “excess inventor” or “ stock-out”,  depending whether the sales are expected to decline or increase during the simulated period. Please note that 40 days is assigned before the expected sales simulation is made.

Thus, the inventory policy rules should be stated as “days to meet the expected sales”