Assume the demand for the drug Wozac during the current year is 50,000, and assume demand will
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Assume the demand for the drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If you build a plant that can produce x units of Wozac per year, it will cost $16x. Each unit of Wozac is sold for $3. Each unit of Wozac produced incurs a variable production cost of $0.20. It costs
$0.40 per year to operate a unit of capacity. Determine how large a Wozac plant to build to maximize expected profit over the next 10 years.
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Related Book For
Practical Management Science, Revised
ISBN: 9781118373439
3rd Edition
Authors: Wayne L Winston, S. Christian Albright
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