VIPSolutionscan you do this using excel ( decision tree ) . Prezcott Pharma Anyone who has fed with an acute or chcnkc is pecbably very appeeciative whainer drup . " avalable ? anr or managr the disease. In the Foold and Diug Administration ( FDA ) is the premmenitl agency hat ove Drugs / ) . Developing new drugs that safely address particular medical issues without producing unpleasant oe dangerous side - effects is a very long and expensive process, often taking 1 0 - 1 5 years of work and costing an average of $ 4 billion. The long lead - time for brining drugs to market is mostly due to required clinical trials. Thus, drug manufacturers have to make very important, high - stakes decisions when they consider whether or not to place a new drug into the clinical trials process Suppose scientists at Prezcott Pharma have discovered a potential drug break - through for the treatment of Alzheimer's disease, and corporate executives now need to decide whether to go forward to conduct clinical trials and seek FDA approval to market the drug. The company has spent $ 2 9 5 million to date in research expenses The cost of clinical trials is expected to be $ 1 4 5 million, and the probability of a suc cessful outcome with only minor side effects is 0 . 1 5 whereas the probability of a suc - cessful outcome with major side effects is 0 . 2 . After the clinical trials are completed the company may seek approval from the Food and Drug Administration ( FDA ) at arn estimated cost of $ 2 5 million. If the clinical trials suggested the drug produced only minor side effects, the chance of FDA approval is 0 . 6 . Alternatively, the chance of gain - ing FDA approval if the drug has major side effects is 0 . 3 5 . The market potential for the drug has been estimated as large, medium, or small, with the following probabili - Minor Side Effects Major Side ffects Revenue Probability 5 8 % 3 % 1 0 % 3 % 5 0 % 1 5 % Large S 4 , 2 0 0 Medium 2 , 1 5 0 s 1 , 5 0 0 5 2 . 3 0 0 S 1 , 4 0 0 Small Revenue is expressed in millions of dellars If Preacott cannot secure FDA approval, it can still try to sell the drug to an interna tional company known to seek drugs that have successfully completed clinical trials but failed to get FDA approval. A business analyst at Prencott estimates that if the drug fails to secure FDA approval, there is a 5 0 % chance that the company can sell the drug for 5 3 0 0 million if the clinical trials reported minor side effects and a 3 0 % chance the com - pany could get $ 2 0 0 million for the drug if the dlinical trials reported major side effects 1 . Develop a decision tree to determine the best course of action recommended by the EMV criterion 2 . Which sequence of decisions may lead to the worst outcome 3 . What is your recommended sequence of decisions and why?
Question:
can you do this using excel ( decision tree ) . Prezcott Pharma Anyone who has fed with an acute or chcnkc is pecbably very appeeciative whainer drup . " avalable ? anr or managr the disease. In the Foold and Diug Administration ( FDA ) is the premmenitl agency hat ove Drugs / ) . Developing new drugs that safely address particular medical issues without producing unpleasant oe dangerous side - effects is a very long and expensive process, often taking 1 0 - 1 5 years of work and costing an average of $ 4 billion. The long lead - time for brining drugs to market is mostly due to required clinical trials. Thus, drug manufacturers have to make very important, high - stakes decisions when they consider whether or not to place a new drug into the clinical trials process Suppose scientists at Prezcott Pharma have discovered a potential drug break - through for the treatment of Alzheimer's disease, and corporate executives now need to decide whether to go forward to conduct clinical trials and seek FDA approval to market the drug. The company has spent $ 2 9 5 million to date in research expenses The cost of clinical trials is expected to be $ 1 4 5 million, and the probability of a suc cessful outcome with only minor side effects is 0 . 1 5 whereas the probability of a suc - cessful outcome with major side effects is 0 . 2 . After the clinical trials are completed the company may seek approval from the Food and Drug Administration ( FDA ) at arn estimated cost of $ 2 5 million. If the clinical trials suggested the drug produced only minor side effects, the chance of FDA approval is 0 . 6 . Alternatively, the chance of gain - ing FDA approval if the drug has major side effects is 0 . 3 5 . The market potential for the drug has been estimated as large, medium, or small, with the following probabili - Minor Side Effects Major Side ffects Revenue Probability 5 8 % 3 % 1 0 % 3 % 5 0 % 1 5 % Large S 4 , 2 0 0 Medium 2 , 1 5 0 s 1 , 5 0 0 5 2 . 3 0 0 S 1 , 4 0 0 Small Revenue is expressed in millions of dellars If Preacott cannot secure FDA approval, it can still try to sell the drug to an interna tional company known to seek drugs that have successfully completed clinical trials but failed to get FDA approval. A business analyst at Prencott estimates that if the drug fails to secure FDA approval, there is a 5 0 % chance that the company can sell the drug for 5 3 0 0 million if the clinical trials reported minor side effects and a 3 0 % chance the com - pany could get $ 2 0 0 million for the drug if the dlinical trials reported major side effects 1 . Develop a decision tree to determine the best course of action recommended by the EMV criterion 2 . Which sequence of decisions may lead to the worst outcome 3 . What is your recommended sequence of decisions and why?
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Created at: 2025-05-14 08:23:20
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