The author shows how, via a linear-programming approach, a life-insurance company can determine objectively minimum and maximum limits for optimum debit size. The requirements are two policy decisions (the minimum allowable compensation and the minimum allowable productivity level) and the determination of the functional relation between sales performance (as measured by new-business commissions) and debit size (as measured by service commissions). Given the foregoing, there can be developed the proper straight-line equations that permit algebraic solution and yield the desired maximum-limit and minimum-limit values.
