The Medicines Company was founded in 1996 for the purpose of acquiring or “rescuing” drugs abandoned by other drug companies, completing their development, and bringing them to market. Its first acquisition, in early 1997, was “Angiomax”-a blood-thinning drug used in angioplasty procedures. In December 2000, it received FDA approval for Angiomax. Now it must bring it to market. Complicating this task is the fact that Angiomax is designed to replace heparin, the most widely used blood-thinning drug in coronary medicine. But heparin sells for about $2 per dose while the cost to make Angiomax is $40 per dose.

1. What price would you recommend the company charge for Angiomax at launch?

The Medicines Company was founded in 1996 for the purpose of acquiring or “rescuing” drugs abandoned by other drug companies, completing their development, and bringing them to market. Its first acquisition, in early 1997, was “Angiomax”-a blood-thinning drug used in angioplasty procedures. In December 2000, it received FDA approval for Angiomax. Now it must bring it to market. Complicating this task is the fact that Angiomax is designed to replace heparin, the most widely used blood-thinning drug in coronary medicine. But heparin sells for about $2 per dose while the cost to make Angiomax is $40 per dose.

1. What is the economic value or value-in-use of Angiomax to a hospital? Be specific in your analysis and assumptions. Elaborate on all the steps in your analysis.

Refer to the data in the Excel (College) File.

a)

Construct a crosstabulation with Year Founded as the row variable and

%Graduate as the column variable. Use classes starting with 1600 and

ending with 2000 in increments of 50 for Year Founded. For %

Graduate, use classes starting with 35% and ending with 100% in

increments of 5%.

b)

Compute the row percentages for your crosstabulation in part (a).

c)

Construct a scatter diagram to show the relationship between

Tuition&Fees and %Graduate. Comment on any relationship between

the variables

You are a financial analyst for a relatively small global car designer that was founded in Australia. Only recently, they have decided to vertically integrate and manufacture cars using their self propulsion technology. The firm has chosen Mexico as its first manufacturing destination, although they will be sourcing material from all over the world. Given the need for the firm to exchange multiple currencies they have asked you to provide and justify the three best strategies for them to reduce their exchange rate risk.

Juskstock supplies was founded by Bob Juskstock in the early days of the oil boom in Newfoundland to supply clothing to offshore drilling rigs and supply boats. He quickly grew the business to selling safety clothing and safety equipment and hired his cousin to manage sales and the final delivery step to customers. Bob is a hands on owner / manager and is involved in all the daily operational decisions. Bob oversees the identification of new products, inventory management and filling of customer orders. There are 10 people in the warehouse who receive, ship, deliver and take direct orders from customers. There is a general office manager who manages the office, does payroll and handles all the financial transactions and accounting with the assistance of 3 clerks. Bob and his cousin meet each morning to decide what gets shipped out that day and assign the shipping & delivery tasks to four of the warehouse staff. All the warehouse staff receive, ship and deliver. Bob rotates the responsibilities amongst the warehouse staff so that their jobs are more interesting, and he can allocate staff as needed each day. Products are generally stored in a specific area based on product type. However, whoever is shipping sometimes has to spend time trying to locate the product. When there is a new product, the shipper often has to find out who received it and where the receiver decided to put it. As the range of products and number of shipments has increased, warehouse staff are starting to become frustrated with the amount of time they spend looking for things. Delivery is starting later in the day than it used to. Sometimes they are not able to complete their deliveries for that day because they run out of time. The staff asked Bob if he could hire a junior person to help find stuff in the warehouse so that they can load the truck faster. Bob and his cousin are so busy keeping up with the current workload that neither is spending any time acquiring new clients. Bob and his cousin are nearing retirement age and Bob would like to sell his company. He has been told by a business advisor that although there is strong potential for growth, his company operations are very dependent on him and his cousin and this is a risk for someone buying his company. His company would fetch a much better price if it were re-structured to remove those strong dependencies and positioned to successfully seek and handle growth. How should Bob restructure his company to • Decrease the daily operations dependency on himself and his cousin • Increase the sales capability • Improve the efficiency of the warehouse • Maintain the loyalty of the staff

FiscalNote is a startup founded by a Washington, DC entrepreneur and funded by a Singapore sovereign wealth fund, the Winklevoss twins of Facebook fame, and others. It uses machine learning and data mining techniques to predict for its clients whether legislation in the US Congress and in US state legislatures will pass or not. The company reports 94% accuracy. (Washington Post, November 21, 2014, “Capital Business”) ConsideringjustbillsintroducedintheUSCongress,do a bit of internet research to learn about the numbers of bills introduced and passage rates. Identifythepossibletypes of misclassifications, and comment on the use of overall accuracy as a metric. Include a discussion of other possible metrics and the potential role of propensities.

A square foundation 1.5? × 1.5? is founded at a depth of 1.5 m below the ground surface in
sand soil having a cohesion ?
′ = 0 ?? ?2 ⁄ and angle of shearing resistance∅
′ = 33°
. The water
table is at a depth of 6 m below ground level. The unit weight of soil above the water table is
? = 18 ?? ?3 ⁄ and the saturated unit weight of the soil ???? = 19 ?? ?3 ⁄ .Use the General
Bearing Capacity Equation. Determine the net allowable bearing pressure for a factor of safety
of 3.

The DeBourgh Manufacturing Company was founded in 1909 as a metal-fabricating company in Minnesota by the four Berg brothers. In the 1980s, the company ran into hard times, as did the rest of the metal-fabricating industry. Among the problems that DeBourgh faced were declining sales, deteriorating labor relations, and increasing costs. Labour unions had resisted cost-cutting measures. Losses were piling up in the heavy job-shop fabrication division, which was the largest of the company’s three divisions. A division that made pedestrian steel bridges closed in 1990. The remaining company division, producer of All-American lockers, had to move to a lower-cost environment.

            In 1990, with the company’s survival at stake, the firm made a risky decision and moved everything from its high-cost location in Minnesota to a lower-cost area in La Junta, Colorado. Eighty semi-trailer trucks were used to move equipment and inventory 1,000 miles at a cost of $1.2 million. The company was relocated to a building in La Junta that had stood vacant for three years. Only 10 of the Minnesota workers transferred with the company, which quickly hired and trained 80 more workers in La Junta. By moving to La Junta, the company was able to go nonunion.

            DeBourgh also faced a financial crisis. A bank that had been loaning the company money for 35 years would no longer do so. In addition, a costly severance package was worked out with Minnesota workers to keep production going during the move. An internal stock-purchase “earnout” was arranged between company president Steven C. Berg and his three aunts, who were the other principal owners.

            The roof of the building that was to be the new home of DeBourgh Manufacturing in La Junta was badly in need of repair. During the first few weeks of production, heavy rains fell on the area and production was all but halted. However, DeBourgh was able to overcome these obstacles. One year later, locker sales achieved record-high sales levels each month. The company is now more profitable than ever with sales topping $6 million. Much credit has been given to the positive spirit of teamwork fostered among its approximately 80 employees. Emphasis shifted to employee involvement in decision making, quality, teamwork, employee participation in compensation action, and shared profits. In addition, DeBourgh became a more socially responsible company by doing more for the town in which it is located and by using paints that are more environmentally friendly.

After its move in 1990 to La Junta, Colorado, and its new initiatives, the DeBourgh Manufacturing Company began an upward climb of record sales. Table 1 shows the DeBourgh monthly sales figures from January 1993 through December 2001 (in $1,000s).

DeBourgh accountants computed a per-unit cost of lockers for each year since 1988, as shown in Table 2. Management has provided you with this data in the form of an Excel workbook.

Source: Adapted from “DeBourgh Manufacturing Company: A Move That Saved a Company,” Real-World Lessons for America’s Small Businesses: Insights from the Blue Chip Enterprise Initiative. Published by Nation’s Business magazine on behalf of Connecticut Mutual Life Insurance Company and the U.S. Chamber of Commerce in association with the Blue Chip Enterprise Initiative, 1992. See also DeBourgh, available at htt;://www.debourgh.com: and the Web site containing Colorado Springs top business stories, available at http://www.csbj.com/1998/981113/top_stor.htm.

The Assignment:

This assignment may be completed in groups of up to 4 students. Your task is to provide Steven Berg with a forecast of sales and per-unit labour costs for 2002.

For each data set:

Plot the data as a function of time.

Select an approach you believe will be effective in forecasting this data set.

?

Write a brief (no more than ½ page) explanation of why you chose the method you did – observations about the data and characteristics of the chosen methodology.

?

Generate a forecast for 2002. Show the spreadsheet(s) you used to build the model. Annotate briefly to explain your methodology.

iROBOT: HOW TO BE A SUSTAINABLE INNOVATOR?

            iRobot, founded in 1990 in Delaware, designs and builds a vast array of behavior-based robots for home, military, and industrial uses. It is among the first companies to introduce robotic technology into the consumer market. Home care robots have been iRobot’s most successful products, with over 5 million units sold worldwide and accounting for over half of its total annual revenue. iRobot has a long-standing contractual relationship with the US government to produce robots for military defense.

            iRobot is fully gauged towards first mover radical innovation with an extensive R&D budget. Made up of over 500 of the most distinguished robotics professionals in the world, it aims at leading the robotics industry. By forming alliances with companies like Boeing and Advanced Scientific Concepts, it is able to develop and improve upon products that it otherwise is incapable of obtaining using only its own technology. The company also has a healthy financial position with an excellent cash and long-term debt rate.

            Despite these competences, iRobot still has serious concerns. Although the robotics industry is not highly competitive, iRobot needs more competition to help build up the total scale and visibility of the fledgling industry it has pioneered. Home care robots, its biggest revenue source, are a luxury supplemental good. Times of economic recession could prove to be a problem for the sales of iRobot’s consumer goods given that discretionary budgets are likely decreased. Although iRobot has over 70 patents, many of which will begin to expire in 2019. In a rapidly advancing industry, technology can also become obsolete quickly and render patents useless. Additionally, iRobot is highly dependent on several third-party suppliers to manufacture its consumer products. It also depends on the US government for the sales of its military products. Any volatility in its supply chain or government fiscal policy will have grave consequences for the company’s future.

Case Study Questions (25 marks each):

1. Prepare a SWOT Analysis for iRobot.

2. What can iRobot “strategically” do to deal with the potential threats? Explain.

3. Under which strategic type, can iRobot fall? Elaborate.

4. In the long run, would iRobot be better served to exit the home consumer products market and concentrate on military and industrial robots where profit margins are better? Discuss.

Shambolic Ltd is a listed company, that specialises in property investment. It was founded by two sisters, Venus and Serena. At different times Venus and Serena have issued shares to bring funds into the company, and together they now own 35 per cent of the issued shares. The other major shareholder is Olympia, who owns 40 per cent, and who is also a director. The rest of the shareholding is held by a range of other shareholders.

There has been a lot of disagreement between Olympia and Venus concerning the direction of the company. Serena always supports her sister. At a board meeting, a decision is made to allot a substantial number of shares to another property investment company, Tutu Pty Ltd. The reason given at the meeting is that Tutu will be able to bring in more funding for Shambolic's investment deals. As a result, Olympia's voting power is reduced to 10 per cent.

Olympia overhears a conversation between Venus and Serena. She finds out that Tutu Pty Ltd is controlled by Venus and Serena's mother, and the real reason the shares were issued was to dilute Olympia's shareholding and voting power, as the sisters were concerned about a takeover attempt.

Advise the directors about the possibility of a legal challenge to their actions.