Contribution margin

In order to determine whether or not the growth in pharmaceutical expenditure entails an increase in the price of the resources used in health production, the important factor to determine is the significance or otherwise of the innovation and its marginal contribution to health production. The large number of new products in some markets, such as Spain, Italy and Germany that provide a very small degree of innovation may constitute an indication of increasing prices rather than an increase in value (contribution to the improvement of health status and welfare). 

Also, according to results presented in Table 13.4, the productivity of pharmaceutical innovation increased with age. For life expectancy at birth, the elasticity of pharmaceutical innovation was less than 0.02, but rose to 0.17 for the life expectancy of men at age 85 and over. This trend in estimated effects suggests that the marginal contribution of pharmaceutical innovations in prolonging life was higher for persons at higher ages. Moreover, the... 

Achieving competitive production costs depends heavily on maintaining a clear focus on those core competences and products that will allow the company to build a distinctive position. This implies that the organizational setup should outsource all non-core functions, including in the portfolio only those production steps or products that show the required margin contribution. 

Finally, tools need to be in place to track the margin contribution for all products and systematically eliminate those which do not meet the required threshold. Internal transfer price systems are typically detached from market dynamics and distort profitability analysis on the level of a single production plant. Such analysis only produces accurate conclusions when performed on the level of products or franchises. 

The spectrum of CIII japanese radish peroxidase exhibits two widely splitted lines with a quadrupole splitting AEq = 2.37 mm s 1 and an isomer shift 8pe = 0.29 mm s 1 at 77°K [145], very similar to those observed in oxyhemoglobin [144], a horseradish peroxidase [146], The electronic structure of the iron is apparently determined by the Fe-C>2 bond with a marginal contribution of the fifth, axial ligand provided by the protein (Fig. 11.8). 

Tritium co-deposition with eroded carbon, during the D-T phase, is anticipated to be the dominant tritium retention mechanism in ITER even if the use of carbon is limited to the divertor strike plates. Retention by implantation and bulk diffusion at the Be-clad surfaces of the first wall and W-clad surfaces of the divertor are expected to rapidly reach saturation, or to marginally contribute to the in-vessel tritium-uptake [95,96], In addition, adsorption of tritium at the inner surfaces of the porous CFC of the vertical target is expected to be very small (few g-T) and adsorbed tritium is not expected to significantly diffuse into the carbon matrix because the temperature of the majority of the bulk CFC will be significantly below 1200 K (Table 12.4). 

Retention by implantation and bulk diffusion on metallic surfaces of the first wall and divertor are expected to marginally contribute to the in-vessel tritium-uptake [96] (see Fig. 12.4). 

Purified CYP2C13 exhibits high testosterone hydroxylase activity in a reconstituted enzyme system, but this enzyme makes only marginal contributions to liver microsomal testosterone hydroxylation. ... 

Occupational safety should be seen as just another commodity that is bought and sold in the marketplace it has a price which reflects both its marginal contribution to worker well-being and its marginal cost of provision by employers. And just as prices for other goods are indicators of their relative worth, so also is the price of safety a measure of its value,... 

There is a formal portfolio optimization process in place and executed on a regular basis (e.g., 2 times a year) to evaluate product portfolio and identify SKUs with underperform sales, lack of clear market strategy or low margin contribution to the company, etc. 

When pure solute (e.g., hydrogen) is used and also when the liquid-phase reactant has a marginal contribution to the total pressure ... 

In achieving lean supply conditions, both buyer and supplier are encouraged to collaborate in identifying opportunities for cost reduction. Embedded in TQ and JIT philosophies, this approach focuses on long-term agreements as the basis for identifying improvement areas. Primary aims are to ensure that appropriate product value is delivered to the customer, that required volume is maintained, and that margin contribution is not eroded. 

The total expected profit from ordering 1,100 parkas is thus 52,340, which is almost 5 percent higher than the expected profit from ordering 1,000 parkas. Using the same approach, we evaluate the marginal contribution of each additional 100 parkas as in Table 13-2 (see worksheet Table 13-1, 2 in spreadsheet ChapterlS-examples). Note that the expected marginal contribution is positive up to 1,300 parkas, but it is negative from that point on. Thus, the optimal order size is... 

Expected Marginal Contribution of Each Additional 100 Parkas... 

CSL is the probability that demand during the season will be at or below 0. At the optimal cycle service level CSL, the marginal contribution of purchasing an additional unit is zero. If the order quantity is raised from O to O + 1, the additional unit sells if demand is larger than 0. This occurs with probability 1 — CSL and results in a contribution of p — c. We thus have... 

Thus, the expected marginal contribution of raising the order size from 0 to 0 + 1 is given by... 

Because the expected marginal contribution must be 0 at the optimal cycle service level, we have... 

The idea of allocating the available capacity to the product with the highest expected marginal contribution can be converted into a solution procedure. Let each product i have a mean demand of /t, and a standard deviation of a-,. Product i has a retail price of pi, a cost c and a salvage value of i,. If quantity g, is allocated to product i, the expected marginal contribution is obtained as... 

The following procedure allocates each unit of capacity to the product with the highest expected marginal contribution. Let B be the total available capacity. 

Compute the expected marginal contribution MQiQ,) for each product i using Equation 13.8. 

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