Sales force incentives

In a global production structure with IT-based information flows that substitute one-to-one relationships, forecasting and planning processes need to be brought to a new level. As mentioned above, this requires clear standards for their execution, support from IT systems, and - most importantly - dear and visible accountability for process quality. More spedfically, the forecast accuracy has to be an element of the performance review and incentive system for the product managers and sales force. 

Most firms offer their sales force monetary incentives based on exceeding a specified target. What are some pros and cons of this approach How would you modify these contracts to rectify some of the problems ... 

This sale and back-lease model is applied by many other pharmaceutical companies. It enables the company to dispose of assets without being forced to lay off employees. The net effect for the industry as a whole is that statistically, the share of outsourcing is increasing. However, the problem of underutilized capacity persists. For a hne-chemical company, the acquisition of an API plant from a pharma company is problematic. Once the supply contract, offered by the pharma company as an incentive for the acquisition, expires, the problem arises as to what the capacity should be used for. This is all the more the case as the plants usually are designed to manufacture just one product and therefore are not truly multipurpose. Last but not least, the plants have been run as cost centers and the implementation of a lean production... 

The government policies in Western Europe are far from uniform in some countries tax incentives have resulted in the replacement of regular by lead free regular other countries promote by tax incentives the use of lead free super and still others only make lead free super and regular available. In the latter case market forces result in virtually no sales of lead free gasoline (the price is higher) which in turn reduces availability. 

It is often widely commentated that LTV is not an indicator of default probability. However, we would argue that a borrower with a 50% equity stake at risk from a potential forced sale of a property would have a greater incentive to maintain debt service payments than if the same borrower had an equity stake of, say, 20%, and so although it may not be the most important influence, the LTV of a loan could be expected to have some influence on the default rate. 

---