Lorex Pharmaceuticals Essay

This discussion question is based on a case study. As in all case studies, review the facts of the case and consider the various steps of the nursing process in order to address the critical thinking questions.

This report is Part 1 of assignment for Marketing MBA 565-MBOL1 to Dr. Stephen Baglione

6. How does the current reimbursement level of $140,000 per case affect a decision to use or not use marginal cost pricing? Does the amount of excess capacity affect the decision? Why?

Breakeven Analysis for Product Tylenol Approach 1 - Same price as Tylenol Approach 2a - Cheaper than Tylenol Approach 2b - Cheaper w/lowered trade cost $ $ $ $ Unit Cost (Variable Cost) 0.60 0.60 0.60 0.60 Trade Cost (Selling Price to Retailers) $ 1.69 $ 1.69 $ 1.05 $ 0.70 Fixed Cost (Advertising) 2,000,000 6,000,000 6,000,000 6,000,000 Break-Even Quantity [Fixed Cost/(Trade Cost-Unit Cost)] 1,834,862 5,504,587 13,333,333 60,000,000 Contribution Margin (Unit) 64% 64% 43% 14%

In our experience with Pharmasim we learned that Marketing decision making must be very sensitive and responsive to everything going on in the industry which is very complex. Consumer responses to marketing tactics can be volatile and unpredictable and no idea is guaranteed to work well. Marketing is a matter of meticulous research, assumptions, planning, and volatility at times. Overall we took away two major points: 1) that it is important to consider the product lifecycle in evaluating how to promote businesses and, 2) that the “Sweet Spot” as a competitive advantage should be the greatest point of consideration when evaluating how to best gain leverage to beat the competition in the minds of

There is more adequate to use different method for calculation. Materials budget based on mashing not number of bottles. In January there is 2 mashing per month, but since February until June is 3 each month.

The product cost per unit under absorption costing is $15.00 and under variable costing are 10.60.

A. The table below lists each category and states whether the cost is relevant, if it is an implicit or explicit cost, and if the cost has been properly calculated (note: company is currently operating at 65% capacity).

|Level 1 Prescription Drugs |$25 copay/30 day supply |$15.00 copay/30 supply |$15.00 copay/30 supply |

Prescription drug prices are on the rise in the United States. Currently, the United States does not implement a price control on prescription drugs. Every day the supply and demand for prescription drugs fluctuates. Pharmaceutical companies produce drugs that are necessary for survival. Therefore, it is necessary for research and development to continue in the United States. Those suffering the effects of exorbitant prices must do so until a generic form of a prescription drug is produced. Once approved by the FDA, new drugs will make their appearance on the market and patients will no longer suffer financially. Until then, it is necessary for pharmaceutical companies to price their drugs based on the idea of supply and demand. This produces the profit used to fund research. Price controls discourage innovation. If a price control were set in place, of course the price of prescription drugs would decrease. However, the development of new drugs decreases with it. Today’s generation would benefit from lower prices, while future generations would suffer from the loss of drug innovation.

Under an ABC system, the allocation of costs to products is achieved through at least four analytical steps. Firstly, costs are grouped into activity levels. Secondly, cost drivers are

The firm initially produces where MR=MC charging price P1 and quantity Qa. At this price the firm has a large amount of

In today’s business world, production cost was an increasing concern for companies working to stay competitive in the global marketplace. The top management must search for a global solution to drive down costs and reduce difficult activities associate with inventory management and production management. Global sourcing aimed to exploit global efficiencies in the delivery of services and goods across geopolitical boundaries, including low cost skilled labor, low cost raw materials, tax benefits, and price breaks. Whelan Pharmaceutical was the best example to illustrate how the company chose the best manufacturing site for global sourcing from different perspectives.

Once again, I took a bottle and Gene and I entered and found the manager up on the 2nd floor. As we approached the manager’s desk, he looked up and said “What can I do for you?” Because my last sales approach with Emma had worked, I handed him a bottle and said, “I have a product that I think you would be interested in.” He took the product in his hands and looked at it - again that quiet, silent moment that seemed like an eternity, and said something much different than Emma, “Why would I be interested in this product?” I quickly thought of Gene’s story so I related it to him. He thought some more and finally said, “I will take a gross.” 144 went through my mind and I knew that we only had 24 left. That is the only time in my life that I ever reduced somebody’s order as I said, “Would you settle for 24 bottles?” He agreed, so Gene went out and grabbed the additional 23 bottles. The manager wrote us a check, found a spot on the shelves next to the candy and placed them there. We were ecstatic - 2 stores and 2 sales. What a successful day! We hurried home and put the family members back to work in producing more capsules by hand. It quickly dawned on me that at $1.15 we would never make a profit to pay for the labor that it too so we readjusted the price. A week later, Gene and I went to the health food store, and found that one had already sold. We then

There's a threshold and once this threshold is met, the pharmaceuticals can be purchased at a discounted