The pharmaceutical company Invivo Diagnostics faces the loss of the product patent for its #1 selling drug. This drug has been responsible for bringing in between $100 and $200 million of the company's revenue. After brainstorming and working through the six-stage problem solving process the team has decided on the problem in which to concentrate on. The problem is to find a drug that will compensate for the loss of sales after its #1 selling product has lost its patent.
Starting with the outcome of the model, the sales revenue from the new product sales and the existing #1 product sales will determine the effectiveness of the model. In other words the sales revenue will determine if the model answers the problem. In order for this to occur the new product sales must compensate for the loss in revenue. The influence chart for Invivo Diagnostics reveals that the new product sales is the decision. As stated above, the new product sales serve as the means of evaluating whether or not the model achieved its intended goal. The new product sales are determined by the price of the product, the number of units produced and the cost of each unit. The existing product sales (denoted by the label #1 Product) are determined by the market effects of the drug losing its patent. This is a random variable. The variable is random because it is unknown how the market will respond after the patent has expired. Sales for this drug may go up or down.
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