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What is Ranbaxy Sales Strategy: DOL Analysis about?
Ranbaxy Ltd manufactures pharmaceutical products through a network of sales agents paid 18% commission on revenues. It is considering hiring its own sales staff paid 10% commission with additional fixed costs of Rs. 20,80,000. Calculating the degree of operating leverage (DOL) at Rs. 2,60,00,000 revenues shows a DOL of 2.89 using agents and 3.51 using own staff, indicating greater operating leverage and risks/benefits from revenue changes with own staff. The calculations and higher contribution margin/fixed
- Author
- PALETI HYNDAVI
- Language
- EN