A sales executive has a difficult time forecasting sales without knowing how many salespeople the firm will employ. Yet, the size of the sales force can be enlarged or shrunk depending on the...

A sales executive has a difficult time forecasting sales without knowing how many salespeople the firm will employ. Yet, the size of the sales force can be enlarged or shrunk depending on the forecast. Similarly, advertising drives sales: If the firm increases its advertising, its sales should increase; if it decreases advertising, its sales should fall. Yet advertising budgets are often based on a percentage of sales. How can these circular problems be tackled?