Biopure Case

Biopure Case

In 1995, the potential total demand for critical cases of Oxyglobin for dogs was 354,750 units of blood. The potential total demand for non-critical cases was 3,902,250. The probability that the consumer will try Oxyglobin is given in the following table below:

Price to Vet (per unit) Price to Pet Owner % of Pet Owners who will try (Noncritical Cases) % of Pet Owners who will try (Critical Cases)

$50 $100 .95*.60 = .57 1*.90 = .90

$100 $200 .70*.40 = .28 .95*.85 = .81

$150 $300 .25*.35 = .09 .80*.75 = .60

$200 $400 .05*.30 = .02 .60*.65 = .40

From the total demand for non-critical and critical cases coupled with the probability the consumer will try Oxyglobin at a given price, potential total demand for each price series can be obtained:

Price to Vet (per unit) Price to Pet Owner Pet Owners who will try (Noncritical Cases) Pet Owners who will try (Critical Cases)

$50 $100 3,902,250*.57 = 2,224,283 354,750*.90 = 319,275

$100 $200 3,902,250*.28 = 1,092,630 354,750 *.81 = 287,348

$150 $300 3,902,250*.09 = 351,203 354,750*.60 = 212,850

$200 $400 3,902,250*.02 = 78,045 354,750*.40 = 141,900

Thus, from the above tables and data potential revenues from Oxyglobin for each price series can be obtained as well:

Price to Vet (per unit) Revenues from Noncritical Cases Revenues from Critical Cases Total Revenues

$50 2,224,283*50 = $111,214,150 319,275*50 = $15,963,750 $127,177,900

$100 1,092,630*100 = $109,263,000 287,348*100 = $28,734,800 $137,997,800

$150 351,203*150 =$52,680,375 212,850*150 = $31,927,500 $84,607,875

$200 78,045*200 = $15,609,000 141,900*200 = $28,380,000 $ 43,989,000

Distribution Options and Costs

National, Regional, and Local Distributors Cost

Manufacturing Selling Price (per unit) Distribution Cost (30% of manufacturing selling