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Exponential decreasing function - incentive model

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  1. #1
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    03-08-2005
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    Exponential decreasing function - incentive model

    Dear all

    My company is selling software subscribtions. The incentive model was so far to calculate the basis for bonus to the sales people, as the revenue for the rest of the calender year on the subscribtion.

    The subsribtion generates a revenue of $100/month. If the sales person sell the subscribtion i january the basis of the bonus calculation is 12*100. If the the sales person sell the subscribtion in october the basis of the bonus calculation is 2*100.

    The hatch here is off cause that the sales people will try to delay sales in the last months of the year into next year for maximization of total bonus amount

    What I want to do is to make a bonus model in excel that encourage sales as fast as possible no matter the month of the year. I am thinking of af exponential decreasing function a bit like the one in the attached sheet. It's dependent of the period. I use the PPMT function. Ex. In the attached sheet if a sale is made in october it will result in a basis of bonus calculation of $200. If I use the PPMT function the basis of bonus calculation is $ 598, which fulfill my purpose. The only problem is that my use of the PPMT function doesn't sum up to 12*100=1200.

    Any suggestions?
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