What price and Why?
To assess what price Oxyglobin should be set at, we must analyze the 4 C's. Firstly, in evaluating the company, we determine that the cost of production is $15 Million per year independent of volume, plus $1.50 per unit variable cost. The current capacity for Oxyglobin is 300,000 units. In exhibits 4 and 5 we determine their break-even cost.
Next, we must determine who the customer is and what their potential is. To do this, we begin by looking at the number of veterinary practices in the US. Exhibit 1 shows the average monthly case load of the 15,000 US veterinary practices. …
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