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how to calculate the total revenue is 400M and the lost could be 20M in that case?

ACR Medical Lab
New answer on Feb 28, 2020
3 Answers
1.4 k Views
He asked on Feb 17, 2020

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Luca
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replied on Feb 28, 2020
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello,

It's all written in diagram 1:

  • Adding all the columns you reach 400M€
  • Considering only columns of 9-10 patients you achieve 20 M€ of lost

Best,
Luca

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Clara
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updated an answer on Feb 17, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

What the case says > Looking back at the diagram 1 shows that out of the total revenue of $400 million about $20 million will be lost.

What it means > 400 million is the sum of revenues from all patients referred, and 20 (i.e.,10 x 2) corresponds to those doctor referring 9 or 10 patients.

Hope it helps!

Cheers,

(edited)

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Ian
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replied on Feb 17, 2020
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Make sure you look at the exhibit!

If you add the revenue from patient # (patients 1 through 10), you'll get $400m.

Doctors that have more than 8 patients (i.e. 9, 10) represent $10m in revenue each, which totals $20m

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Luca gave the best answer

Luca

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