Lorex Pharmaceuticals Essay Example | Topics and Well Written Essays - 1250 words

Lorex Pharmaceuticals - Essay Example This essay discusses that Lorex Pharmaceuticals has developed and holds all patent rights to Linatol, a new high blood pressure medicine. Since the pharmaceutical industry operates in a monopolistically competitive atmosphere (where no specific pharmaceutical company dominates the market), the patent-holder of a new product can have considerable market advantage over other companies. Lorex pharmaceutical is therefore seeking solutions to optimize this competitive advantage by balancing cost, productivity, and quality with regards to the production of Linatol. To reach this end, the managers of Lorex Pharmaceuticals must determine and select a target amount to which each of the 10-ounce bottles of the product would be filled. This task takes into consideration two issues: 1) Specifying higher fill targets will lead to higher material cost but fewer seconds, and 2) use of the one-standard-deviation rule can cause production delays. Using tests to determine the optimal fill-line, it has been established that 10.17-ounce mark would result in optimal production and maximum returns. Since probability analysis is only suggestive and the accuracy increases with samples size, it is recommended that more tests be conducted to reach more accurate results. Quality assurance managers of Lorex Pharmaceuticals must determine and select a target amount to which each of the 10 ounce bottles of Linatol, a new high blood pressure medicine, would be filled. ... The pharmaceutical industry is ever changing, as can be seen from the many changes in the structure of markets and organizations that occur over the years. Competition in the industry is intense, which means that mergers, acquisitions, etc. are not uncommon. In the pharmaceutical industry in the U.S., there is an extreme contrast between a specific products market during patent enforcement (where a patent holder may control over 80 percent of the product's market and can charge premium prices) and after the patent expires (where market control is reduced to about 30 percent because of the many sellers and buyers that soon emerge after patent expiration). Lorex Pharmaceuticals has developed Linatol, a new high blood pressure medicine, and the company holds all patents right to it. A company that develops a new drug has the potential to realize very large profits. Decisions in manufacturing budgets and product specifications influence the capacity of a particular product line. These, in turn influence the productivity and actual profit of the company. Thus, manufacturers must take into consideration the cost and quality factors that go into production. It is not unusual for companies to pursue trade-offs in cost, productivity, and efficiency in order to pursue specific markets. This however, can result in poor product quality. This case analysis aims to present some solutions that would help Lorex Pharmaceuticals strike a balance between cost, productivity, and quality. Possible Decision Alternatives Quality assurance managers of Lorex Pharmaceuticals must determine and select a target amount to which each of the 10 ounce