Janes Attic (adapted from text)

After reading the case below, answer the three (3) questions which follow. Since this is an individual assignment and is not to be shared with your classmates, send your responses via this drop box. Each question and its subpart should be answered in a separate paragraph clearly marked 1., 2,, and 3. and must be answered in complete, grammatically correct, properly spelled sentences. Please be certain to present comprehensive answers to the questions, however do not write more than five (5) sentences per question. See the rubric for more information on grading.

Please note the following as you review the grading rubric:

• If your assignment rates unacceptable in any category, you will not receive a passing grade on this assignment.
• If your assignment rates effort, but unacceptable in any category, you will not receive a grade higher than C on this assignment.
• If your assignment rates satisfactory in any category, you will not receive a grade higher than B on this assignment.

Case Study - During November 2008, Jane Whitler decided to open a high-end used furniture store. Jane lived in a major metropolitan area in Southwest United States, and part of the growth of the city over the last 35 years was an increasing retired population. Many of the retirees starting to visit the city as snowbirds from the Midwest and Northeast as they neared retirement, then moved to spend their retirement years in the desert Southwest. Many of the first-wave of retirees that moved to this city back in the mid-1970s were now dying. One of the consequences of this aging population was that many estate sales occurred where Jane could purchase fine quality used furniture at very attractive prices. In addition, more and more retirees aged and got tired of the upkeep on the retirement houses they purchased a couple of decades earlier. Increasingly, they were deciding to move into retirement villages, and this triggered sales of their many high-quality home furnishings. By year end 2011, Jane was very pleased with the sales volume of Janes Attic of nearly $2 million. At the same time, Jane looked back at the last two years and, although sales rose from $650,000 in 2009, she couldnt figure out why she was still losing money. In 2009, she lost $68,000, in 2010 the loss was $31,000, and in 2011 it was down to $20,000. She was determined that 2012 would be profitable. But, she also noticed that sales were beginning to plateau, and thus, she could not expect to easily grow her way out of the problem.

Sales Force Performance Data
Salesperson	Average Transaction	Gross Margin Percent	Total Transactions
Joe	$419	48%	378
Hector	$307	40%	412
Sally	$371	46%	329
Amy	$400	43%	401
Jean	$514	47%	395
Mark	$795	44%	412
Jason	$441	48%	470
Irene	$388	42%	401
Wayne	$441	42%	399
Maria	$703	46%	404

Recognizing that her biggest operating expense was compensation of her 10-person sales force, she decided to consider the possibility of a new sales force compensation plan.

Case Study Questions:

1. Which of Janes 10 salespeople are the top two performers and which are the bottom two performers?
2. Should Jane lower the base monthly compensation to $1,000 from $1,500? Are there any other changes she should make to the compensation plan?
3. What should be the minimal performance that Jane should expect from her salespeople in order for them to retain their jobs? How soon should Jane decide if a salesperson should be retained or terminated?