Question

It costs a pharmaceutical company $75,000 to produce a 1,000-pound batch of a drug. The average yield from a batch is unknown but the best case is 90% yield (that is, 900 pounds of good drug will be produced), the most likely case is 85% yield, and the worst case is 70% yield. The annual demand for the drug is unknown, with the best case being 20,000 pounds, the most likely case 17,500 pounds, and the worst case 10,000 pounds. The drug sells for $125 per pound and leftover amounts of the drug can be sold for $30 per pound. To maximize annual expected profit, how many batches of the drug should the company produce? You can assume that it will produce the batches only once, before demand for the drug is known.

Answer 1

Answer :

Consider the generation arranging of a pharmaceutical company.The organization produces 1000 pound of medications in a solitary batch.The organization needs to gauge no.of bunches required to limit the all out expense.

Information given :

The expense of creation for the organization = $ 75,000 as entered.The units delivered are sold at a cost of $ 125 for every pound.The abundance units created are sold at 30 for every pound.These esteems entered.

Particulars A Pharmaceutical company	B
Cost per batch	$ 75,000
Sell price	$ 125
Leftover	$ 30

The normal yield from a bunch of 1000 pounds of medications is a triangular dispersion given by = Risk triangle(A9,B9,C9)

The most exceedingly bad case,most likely,and best case rates are entered in A9,B9,C9 separately.

The yearly interest is additionally a triangular dispersion with most noticeably bad case,most likely,and best case an incentive as 10000,17500,20000 separately.

Next segment of yearly Demand,Batch no,units produced,and continue?are made.

Yearly Demand is acquired by the recipe = Risk triangular(A13,B13,C13)

Units delivered is obtained by the recipe = 1000 * Risk triangular(A9,B9,C9)

At long last we check if adequate measure of medications is delivered or not by the recipe = IF(SUM(C16 : C17) < A$16,:Yes","NO")

Procedure is proceeded till NO is obtained.

Yearly expense is result of expense per cluster and no of groups = B3 * G15

Units delivered is acquired as aggregate of units created from individual clusters = SUM(C16 : C17)

Abundance units will be units delivered short interest as demonstrated = G17 - A16

At long last we have the benefit as pursues = A16 * B4 + G18 * B5 - G16.

Risk estimation is finished by the accompanying procedure :

1)Data is entered.Start@ chance an ectra tab is shows up in the menu bar.

2)The yield cells NPC with offer and NPC without offer.Add yield is chosen from hazard menu.

3)Enter cycles are 500 and recreation as 5.Select begin reenactment.

Particulars	Cell	Sim	Graph	Min	Mean	Max	5%	95%
No.of batches	G15	1	22	22	22	22	22	22
No.of batches	G15	2	22	22	22	22	22	22
No.of batches	G15	3	22	22	22	22	22	22
No.of batches	G15	4	22	22	22	22	22	22
No.of batches	G15	5	22	22	22	22	22	22

From the simulation we conclude that 22 batches are required.This will give the company an annual profit of $ 165,066.

Note : I solved this problem as my knowledge and the answer is approximately correct,If the answer is wrong please excuse me and comment me and again i will try to solve it,but the procedure is correct.