The relationship between inputs (marketing efforts) and outputs (sales goals or results) is known as input-output efficiency-a measure of sales organization efficiency. From the data given below, the efficiency ratio is _______________.
Data:
(1) 3,000 sales calls at $100.00
(2) 5,000 telephone calls at $1.00
(3) 15 trade magazine advertisements at $1,000
(4) Sell 2,000 new office machines ($1,000 each) @ $500 gross margin

Question

Quizplus · Accepted Answer

The efficiency ratio is calculated by dividing the total gross margin by the total cost of marketing efforts. Total gross margin is 2,000 machines * $500 = $1,000,000. Total cost is (3,000 * $100) + (5,000 * $1) + (15 * $1,000) = $320,000. Efficiency ratio = $1,000,000 / $320,000 = 3.125.

The Relationship Between Inputs (Marketing Efforts) and Outputs (Sales Goals