Kos Medics has a regular field sales force that services retail stores.  In addition, it has a national account manager who has been finding new retail chain accounts.  It currently has 379 stores on account, but has recently picked up another chain that will add another 82 stores starting in September.

On average, it takes about two hours for a field rep to make a call on a store, including travel time.  These salespeople are expected to make about four sales calls per day and to call on each account once every two weeks throughout the year.  Each salesperson is required to regularly visit particular, assigned stores on this schedule, so size of the sales force that is needed to service these stores depends on the number of accounts that we have.

Salespeople are compensated with a salary of $31,000.  Ninety-percent receive a bonus of $9,000 for reaching a required quota, and fifty percent receive an additional $9,000 bonus for reaching a second level quota.  Benefits, expenses, and such require about another $7,000 [plus the last three digits of your student ID, in dollars] per salesperson in costs. 

Those who do not reach quota are fired and replaced. Our training expenses are $5,000 [plus the last three digits of your student ID, in dollars] per new salesperson (i.e., there is a cost to turnover).

Note that two of the values in the above case are based on your unique student ID.  For example, if the last three digits in your student ID are 123, then you will use benefits/expenses of $7,123 per sales person and training expenses of $5,123 per new sales person.

Calculate the total annual field salesforce budget that will be required after the addition of the new stores starting in September.  As the national account manager, write a memo to your superior, the vice president of marketing, requesting and defending your new annual budget for the regular field sales force (i.e., just the folks who service individual assigned stores, exclusive of managers, staff support, the national account manager, and such).

Your memo should at least include the objective of the memo, your analysis, assumptions that you made in conducting the analysis, the final recommendation for your budget, and an appendix or attachment that clearly details and explains/illustrates how you arrived at the budget (your calculations).  Please maintain this attachment as part of the same word-processed document as your report -- I will only open one single document, no matter how many you send.