Mathematical Territory Design: Solving the B2B Allocation Problem with Operations Research

The article discusses the transformation of sales territory optimization from a manual, spreadsheet-based process to an automated, algorithm-driven approach using Operations Research techniques. Here's a summary of key points and concepts:

1. Territory Optimization as Combinatorial Problem:

   • Territory design is not just about mapping territories but involves complex combinatorial problems such as balancing capacity and aligning human expertise with territory requirements.

2. Automated Capacity Planning:

   • Use mathematical models to predict exact territory requirements, eliminating the need for manual headcount estimation.

3. Bias-Free Boundary Drawing:

   • Implement Longest Processing Time (LPT) scheduling algorithm to ensure every territory has equal earning potential, reducing subjective boundary drawing.

4. Maximizing Seller ROI:

   • Deploy the Hungarian Algorithm (or Bipartite Matching) to match sellers' expertise with territory requirements efficiently.

5. Handling Manager Overrides:

   • Develop algorithms that can instantly suggest optimal counter-swaps when managers manually override territory assignments, ensuring balance is maintained.

6. Hierarchical Quota Assignment:

   • Connect the optimized territories to a hierarchical quota assignment system using Directed Acyclic Graphs (DAG) for cascading sales targets

Read the full article at Towards AI - Medium

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