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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 …

…Biopure to recruit and maintain a sales force of approximately 10 employees (at an estimate total cost of $100,000 per) and carries a $10-$15 distribution cost per unit. With 750 emergency practices, each sales person would be assigned 75 practices. At 300,000 units the distribution cost is $4,500,000 on the high end and our staff costs and administration costs an additional $1,000,000. Therefore, our $5,500,000 cost is more favorable to the $9-13.5 Million for an independent distributor and is built into our $200 price.