Use the Table Below to Answer the Following Questions) -Which of the Following Conditions Is the Optimal Solution to Pharmaceuticals
Use the table below to answer the following questions) .
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed.
-Which of the following conditions is the optimal solution to the newsvendor problem, where Q is the quantity to be purchased, and D is demand?
A) Q > D
B) Q = D
C) D > Q
D) Q / D = 0
Correct Answer:
Verified
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