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# Pharmadex - Assumptions Revenue for any drug is a constant...

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Revenue Drug1 200*S1^0,5 Drug2 150*S2^0,75 Drug3 180*S3^0,6 Drug4 300*S4^0,3 ASSIGNING SALESPEOPLE TO DRUGS AT PHARMADEX Pharmadex sells four drugs. It costs Pharmadex \$50.000 per year per salesperson.The annual revenue generated from each drug is a function of the number of salespeople assigned to the drug. This dependence is shown in the Table below, where Si is the number of salespeople assigned to drug i,and revenue is expressed in thousands of dollars. If Pharmadex wants to maximize profit (revenue from sales minus salesperson costs), how many salespeople should it assign to each drug?

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Exhibit 11 Pharmadex salesforce allocation model
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Unformatted text preview: Assumptions: Revenue for any drug is a constant times the number of salespeople raised to a power. All monetary values are expressed in \$1000s. Coefficients of revenue functions (with revenues expressed in \$1000s) Drug 1 2 3 4 Constant 200 150 180 300 Power 0.5 0.75 0.6 0.3 Cost/salesperson \$50 Salesforce allocations Drug 1 2 3 4 Totals Number assigned 1 1 1 1 4 Revenue \$200 \$150 \$180 \$300 \$830 Profit \$630 Range names used: UnitCost - B12 Assigned - B16:E16 TotAssigned - F16 Revenues - B17:E17 TotRevenue - F17 Profit - B19 A B C D E F G H I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19...
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Pharmadex - Assumptions Revenue for any drug is a constant...

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