Freemark Abbey Winery Case - 1013 Words

Baur Bektemirov BUSF 36106: Assignment 5 Freemark Abbey Winery Assume that under no unusual circumstances (no storm), Jaeger sells 1,000 cases of Riesling. Consider diï ¬â‚¬erent cases: 1. Jaeger harvests grapes in anticipations of storm. Then the total revenue will be equal to 12Ãâ€"1000Ãâ€"$2.85 = $34200. 2. Jaeger doesn’t harvest and there is no storm with 50% chance. 2.1. With 40% chance, sugar concentration is 25%, then the total revenue is 12 Ãâ€" 1000 Ãâ€" $3.50 = $42000 2.2. With 40% chance, sugar concentration is 20%, then the total revenue is 12 Ãâ€" 1000 Ãâ€" $3.00 = $36000 2.3. With 20% chance, sugar concentration is below 20%, then the total revenue is 12 Ãâ€" 1000 Ãâ€" $2.50 = $30000 3. There is storm with 50% chance 3.1. Storm causes botrytis†¦show more content†¦MicroPharma will receive 75% of sales in the U.S. and only 10% from sales overseas. v. A ï ¬ rm receives proï ¬ t for the 10 years after if launches its product in 2003, starting from year 2004. During ï ¬ rst years, the sales are increasing in an arithmetic progression starting from 0 in 2003 and reaching the peak in 2008. Since all numbers are in constant dollars, the total sales equal to the sum of sales in each year. If MegaPharma decides not to buy rights or license from MicroPharma, there is 50% chance of successful Phase 2 and 80% chance of successful Phase 3 (conditional on success of Phase 2), and 100% of success in FDA Review. Thus, MegaPharma has 40% chances that the the compound will be approved. If it passes Phase 2, Phase 3, and Review, MegaPharma will spend $52 million. Total MegaPharma’s anticipated sales of the compound are equal to 100 + 200 + 300 + 400 + 500 + 500 + 500 + 500 + 500 + 500 = 4000 million, total revenue is 75% Ãâ€" 4000 = 3000 million, if MegaPharma is the only supplier. If both MegaPharma and MicroPharma are on the market, the anticipated revenue is only a half: $1500 million. Total MicroPharma’s anticipated sales in the US are equal to $3660 million, and the revenue is $2745 million; anticipated sales overseas are equal to $3660 million and the revenue is $366 million, thus, 3111, if MicroPharma is the monopoly and 3111/2 if it has to share the market withShow MoreRelatedCase Study : Freemark Abbey Winery2635 Words   |  11 Pages Case Study Freemark Abbey Winery Dallas Baptist University Leah Bynum Megan Bynum Harrison Daniels III Brandon Decker MANA-6302-N1â€Æ' Case #21 Freemark Abbey Winery The partnership, which owns the Freemark Abbey Winery, is faced with a dilemma. The winery is located in the Napa Valley region of California, an area known for producing some of the finest wine on the planet. Freemark Abbey is located in the ideal central and southern areas of the valley. The climates, as well as decisions made during