Individual target to meet overall target

[Sweeteacha]

Hi All

We have an average sales in X company and want to target for 5% increase in next year

So want to set up a goal for each sales manager to meet the overall goal

I have data like:

Manager name    product                   sales

 ABC                           A                       2345

ABC                            B                        2323

ASD                            A                         3434

GHR                           G                          2434

So average of sales now  = overall sales lets say 1234

Overall Goal =  5% increase in an average of sales  i.e 1295 in end of 2020

So want to set a target for individual manager how much each manger has to have average sales to meet  overall goal

Given individual manager current average and variation, plus # of product sales, because some manager have sold 1000 and some juts 50…..how do we set up a goal for each manager?

[Reeza]

How are you calculating 'average sales'? Are you weighting each person or just saying an average increased based on your total sales increase?

In general, if you want a 5% increase, you could just set everyone's target 5% higher then, or is there something more complicated you're looking for here? If so, what factors need to be considered? Does it vary by product? Sales person? Level of sales?

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@Sweeteacha wrote:

Hi All

We have an average sales in X company and want to target for 5% increase in next year

So want to set up a goal for each sales manager to meet the overall goal

I have data like:

Manager name    product                   sales

 ABC                           A                       2345

ABC                            B                        2323

ASD                            A                         3434

GHR                           G                          2434

So average of sales now  = overall sales lets say 1234

Overall Goal =  5% increase in an average of sales  i.e 1295 in end of 2020

So want to set a target for individual manager how much each manger has to have average sales to meet  overall goal

Given individual manager current average and variation, plus # of product sales, because some manager have sold 1000 and some juts 50…..how do we set up a goal for each manager?

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[Sweeteacha]

The average is calculated just by sum of total sales / # of rows

I need to have weighted target for each manager. Some manager have higher influence on average overall and their sales is skewed to right and some are in lower quartiles.

I am not sure how we can do  but generally speaking if we want to target for each managers to meet the  5% increase goal how do we model it?

[PaigeMiller]

Hello @Sweeteacha 

As with your earlier question, there simply is not enough information here for us to help you. The problem, as worded is very vague, and there are probably dozens of different approaches. Based on what you have stated, the solution from @Reeza of increasing everyone's goal by 5% works, and is the simplest solution as well.

I strongly suggest you sit down with your professor, or a colleague who has done things like this in the past, and get some guidance. Step 1 is to define the problem clearly, and then figure out where statistical methods can help.

[Sweeteacha]

Thank you Miller

I thought of 5% increase in all manager's current average sales. The only thing I was not sure is.... is it ok to have flat 5% to all of them because every sales manager has different in terms of # of product sales per day, the cost of product, etc. what if one manager is already exceeded the goal ,,, is it fair for him to again improve the sales by 5 %? 

is there any way to adjust  that?

I know its not straight forward.. I am here to seek some guidance as I am very lost here

[PaigeMiller]

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@Sweeteacha wrote:

Thank you Miller

I thought of 5% increase in all manager's current average sales. The only thing I was not sure is.... is it ok to have flat 5% to all of them because every sales manager has different in terms of # of product sales per day, the cost of product, etc. what if one manager is already exceeded the goal ,,, is it fair for him to again improve the sales by 5 %? 

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These are policy questions, these are not statistical questions, these are not SAS questions. We don't know what is "fair" in your problem.

is there any way to adjust  that?

I know its not straight forward.. I am here to seek some guidance as I am very lost here

The word "adjust" is too vague in this context to have any meaning. There are probably dozens of approaches. You pick the approach (or in the wording of my earlier message "define the problem clearly"), we can probably help with the statistics and SAS.

[Sweeteacha]

Actually I am struggling in the approach. Any idea to start? I will do some research  if I get some direction

[SteveDenham]

You might consider this as a linear programming problem - how to attain an overall 5% goal, with constraints on the increase any single salesperson might have.  The constraints would enable you to make sure that the highest performing salespeople do not have to add an exorbitant amount, while lower performing salespeople would have to exceed a 5% target.

Once upon a time when I was a manager, this was the sort of thing that I had to do every year after annual reviews. I would be given a fixed percentage increase in salaries. Allocating amounts based on performance, while maintaining at least some increase for all associates, fits this scenario.

SteveDenham

[Sweeteacha]

Thank you Steve.

I did similar to my merit increase model based on each employee performance ( high solid low) and their current salary based on market. We had  specific % allocated per each 3*3 cell ( i.e high performance and high salary will get 2% increase, low performance and high salary will get 0% merit etc.) and did goal seek function to stay at our budget.

However on my current case that % is not allocated and need to do some kind of statistical modeling to have optimal %. I am not a statistician at any means but have solid understanding on the insides of model if somebody could  guide me what model/test to apply based on my business case.

I will investigate linear programming. Do you have any  article or link that is relevant ? Please do share.

Much appreciated

[Reeza]

Then this sounds like an optimization problem, but you'll have to define your constraints well. Most likely the model will end up being the old adage 'the reward for good work is more work' though so you'll want to be careful with that, in terms of your constraints. It will likely put higher targets on individuals who preform well. In my opinion, that's why this is a business/practical decision, not an optimization problem. I can see how you may want to an optimized solution to help drive your decision making. 

If you want to treat it as an optimization problem, you'll like need SAS/OR license and you'll want to look into PROC OPTMODEL.

https://documentation.sas.com/?docsetId=casmopt&docsetVersion=8.1&docsetTarget=casmopt_optmodel_exam...

Good Luck.