Question: Use the table below to answer the following question(s). Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug.

Use the table below to answer the following question(s). 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 $150. A discount rate of 8 percent is assumed. Dresden Pharmaceuticals Data Market Size Unit (monthly Rx) revenue ($) Unit (monthly Rx) cost ($) Discount Rate (per cent) 3,000,000 420 150 Project Costs R&D ($) Clinical Trials ($) 875,000,000 145,000,000 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? O QID=0 O Q>D O Q =D ODO
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