## Former General Electric chief Jack Welch, is an enthusiastic advocate of forced ranking, calling it the vitality curve.

Former General Electric chief Jack Welch, is an enthusiastic advocate of forced ranking, calling it the vitality curve. Forced ranking is seen by some as a handy grading tool for creating a high-performing culture. In this problem you will examine some of the implications of forced ranking. You are trying to build a high-performing sales force. However, it is hard to ascertain the quality of a sales agent without employing them for some period. You decide on a policy of hiring a large number of agents for one year. If an agent generates a revenue that puts them in the top 2.5% of all agents, you will retain them. Otherwise, you will let them go. Extreme, yes, but you want a very high-performing sales team. The revenue that an agent brings in varies from one year to the next, but not according to the same distribution for every agent; it so happens that sales agents are of two kinds. Good sales agents generate an annual revenue that is normally distributed with a mean of \$120K and standard deviation \$5K. Bad sales agents generate an annual revenue that is normally distributed with a mean of \$100K and standard deviation \$20K. Assume your initial pool of sales agents is split 50-50 between good and bad.

1.      You have decided to find the revenue cutoff which results in 2.5% of all agents being retained. Using Excel, create a table which shows, for each possible cutoff from \$115,000 to \$140,000 in \$1,000 increments,

(1) The fraction of good agents who make the cutoff,

(2) The fraction of bad agents who make the cutoff,

(3) The fraction of all agents who make the cutoff,

(4) Of those who make the cutoff, the fraction who are good. Include the table in your answers. What cutoff in this table comes closest to your goal of 2.5% retention?

2. If you use the cutoff you found in (a), what percentage of the agents you retain will be

### Strategic Management Project

Assignment Content Review the Strategic Management Project Background and your strategic management research journal entries from Weeks 1–4. Create a 10-slide presentation for Caterpillar Inc. leadership in which you summarize your key findings, propose….

### Case Problem Investment Strategy

Case Problem Investment Strategy J. D. Williams, Inc. is an investment advisory firm that manages more than \$120 million in funds for its numerous clients. The company uses an asset allocation model that recommends the portion of each client’s portfolio to be invested in a growth stock fund, an income fund and a money market fund. To maintain diversity in each client’s portfolio, the firm places limits on the percentage of each portfolio that may be invested in each of the three funds. General guidelines indicate that the amount invested in the growth fund must be between 20% to 40% of the total portfolio value. Similar percentages for the other two funds stipulate that between 20% to 50% of the total portfolio must be in the income fund and at least 30% of the total portfolio value must be in the money market fund.   In addition, the company attempts to assess the risk tolerance of each client and adjust the portfolio to meet the needs of the individual investor. For example, Williams just contracted with a new client who has \$800,000 to invest. Based on an evaluation of the client’s risk tolerance, Williams assigned a maximum risk index of 0.05 for the client. The firm’s risk indicators show the risk of the growth fund at 0.10, the income fund at 0.07 and the money market fund at 0.01. An overall portfolio risk index is computed as a weighted average of the risk rating for the three funds where the weights are the fraction of the client’s portfolio invested in each of the funds. Additionally, William’s is currently forecasting annual yields of 18% for the growth fund, 12.5% for the income fund and 7.5% fir the money market fund. Based on the information provided, how should the new client be advised to allocate \$800,000 among the growth, income and money market funds? Develop a linear programming model that will provide the maximum yield for the portfolio. Use your model to develop a managerial report.   Managerial Report: a.Recommend how much of the \$800,000 should be invested in each of the three funds. What is the annual yield you anticipate for the investment recommendation change? b.Assume that the client’s risk index could be increased to 0.055. How much would the yield increase and how would the investment recommendation change? c.Refer again to the original situation where the client’s risk index was assessed to be 0.05. How would your investment recommendation change if the annual yield for the growth fund were revised downward to 16% or even to 14%? d.Assume that the client expressed some concern about having too much money in the growth fund. How would the original recommendation change if the amount invested in the growth fund is not allowed to exceed the amount invested in the income fund? e.The asset allocation model you developed may be useful in modifying the portfolios for all the firm’s clients whenever the anticipated yields for the three funds are periodically revised. What is your recommendation as to whether use of this model is possible?

### Case Analysis

You can view the article (the case), “The Man Who Got Honeywell’s Groove Backt”, by linking to the course EReserves  Follow the Case Analysis Outline given in your syllabus. This is….