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of responsibility and, together with compactness, to reduce the unproductive travel
time of the sales force. Unfortunately, as basic units are typically points, it is not
clear how to assess contiguity. Moreover, it is important to point out that the desire
for compact districts is born out of necessity because the actual travel times are
usually impossible to determine efficiently. The hope is that geographically compact
and contiguous districts result in smaller travel times on a day-to-day basis than non-
compact and/or non-contiguous districts.
As the main goal of most companies is to maximize profit, several authors
relax the assumption that the sales potential of customers is fixed. Instead, they
propose an integration of time-effort allocation and territory design methods to
increase profit while maintaining the equitable workload criterion (cf. Lodish 1975 ;
Glaze and Weinberg 1979 ; Zoltners and Sinha 1983 ). These models not only assign
customers to sales people but also determine how much time should be invested
in the customer. Some authors even object that equity is not the primary goal for
most companies. Instead, the aim should be to maximize profits, regardless of
any balancing aspect (Skiera and Albers 1994 ; Drexl and Haase 1999 ). However,
in practice sales persons are typically reluctant to implement such detailed call
plans resulting from pure profit maximizing approaches (Zoltners and Sinha 2005 ).
Moreover, designing territories is a mid- or even long-term decision whereas time-
effort allocation is an operational problem that is influenced by weather (espc. in
the beverage industry), sales promotions, etc. Thus, these two problems should be
addressed separately.
Often, the number of districts to be designed is predetermined by the designated
sales force size (Fleischmann and Paraschis 1988 ). If the size is not self-evident,
methods based on the total workload involved in covering the entire market
compared to the available time per sales person can be used. Another possibility
is to follow the “decreasing returns” principle and add sales persons to the sales
force as long as the expected increase in profit exceeds the expected increase in
costs (Howick and Pidd 1990 ; Zoltners and Sinha 2005 ).
As sales persons have to visit their territories regularly, their home-base, e.g.,
office or residence, is an important factor to be considered in the alignment process.
However, there is no consensus as to whether predetermined locations should be
kept or be subject to the planning process. On the one hand, most sales persons have
strong preferences for home-base cities. Hence, such locations should be respected
or determined prior to the alignment to socialize them with the sales management
(Zoltners and Sinha 2005 ). On the other hand, addresses and sales personnel
frequently change and the management often does not want sales persons residences
to overly influence the definition of territories (Fleischmann and Paraschis 1988 ).
23.2.3
Service Districting
The problem of designing service districts appears in various contexts. One area of
applications focuses on social facilities, like hospitals or public utilities. Sometimes
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