Operations and Project Management
To calculate the EOQ, the below formula can be used:
|EOQ = SQRT(2 × Quantity × Cost Per Order / Carrying Cost Per Order)|
EOQ = SQRT (2 × 43200 × 112/0.125)
EOQ = SQRT (2 × 43200 ×896)
EOQ = SQRT (77414400)
EOQ = 8798.55 UNITS 0r 8799 Units
Placing Orders = annual demand of 43200 divided by order size of 8798.55 needles
= 4.9 or 5 orders
Total ordering cost is hence $560 ($112 multiplied by 5).
Average inventory held = (0+8799)/2= 4400
So, total holding costs = ($125*4400) /1,000
Purchasing costs of needles = 20 cents * 8799
Total costs = $560+$550 + $1759.8
Re-order stock = (Average daily units * Delivery lead time) + Safety stock
= (120 * 7) + 90 * 120 (in last year, 4 times stock outs means 360/4 =90 days)
= 11640 units
18 cents per needle, if the hospital was prepared to order 50,000
Total ordering cost per annum= 900,000 cents
After evaluating both options, it can be recommended that first option will be the most suitable for the company due to cost saving. From first option, it is determined that total cost of purchasing needles will be $2869.8, if the hospital adopts the EOQ approach in measuring the inventory level. On the other hand, if the firm purchases the needles from the competitor of the existing suppliers, it will have to pay $9000 for the required demand of needles. It means the EOQ approach will be more cost effective for the hospital as compared to another option of purchasing from the competitor (Dufosse, et al. 2017).
The hospital may proceed to minimise the long term cost of needles by developing a strong relationship with the suppliers. A Strong relationship with the supplier can be helpful for the hospital management to reduce the purchasing costs. At the same time, the hospital needs to evaluate the performance of the existing and possible suppliers to determine their effectiveness in providing the orders in terms of costs and quality. It can be helpful for the hospital to choose the best suppliers who could make the supply of the needles with consideration of cost and quality in long term (Pinson, 2013). In addition, the use of software and techniques like SCM software, RFID, etc. can be effective to track the number of available needles in the stock to manage the supply in long term effectively.
Total number of patients in a week = (75*5) + 32+27
Proportion Time was taken:
42% -3 minutes or less
29%- 3–5 minutes
16%- 5-7 minutes
8%- 7-9 minutes
3% -9-11 minutes
2% -More than 11 minutes
The proposal is to offer a free prescription to any patient that has to wait for more than five minutes.
So, the proportion of total patients, which will get a free prescription, would be:
Therefore, the number of patients, who will get a free prescription on adopting the proposal of the chief pharmacist, will be:
= 126 patients will get free prescription in a week if the proposal is accepted.
The cost of a prescription charged to each patient varies but the average has been calculated as $93.50. So, the total costs that will be occurred for the hospital on adopting the proposal:
= $11781 per week
On the basis of the above calculation, it can be stated that the there will be a decline in SRSH profits by $11781per week. It is because this will reduce the revenues by this calculated amount per week that will also reduce the profitability of the SRSH if the proposal from the Chief Pharmacist was introduced. There may also be practical problems when implementing this proposal. It is because any patient may delay the awaiting number to get the opportunity of free prescription (Gaichas, et al., 2017). Apart from this, there may be possibility that it may be difficult to determine the awaiting time for each individual that may cause complexity in applying this proposal.
One of the ways to reduce the pharmacy queuing times, especially at peak times is to recruit the additional staff or pharmacist with additional counter to distribute the medicines to the patients. It can be useful for the SRSH to reduce the waiting time because the appointment of additional staff will increase the speed of distributing the drugs to the patients and reduce their waiting time. Another way is to segment the patients based on their priority (Williams, et al. 2013). If a group of patients needs medicine, that can be done very quickly or has short prescription, give them special line so they do not have to wait for the slower patients or patients having a long prescription.
It can also be effective for SRSH to reduce the waiting time by separating payment and identity check from the preparing the correct drugs. Separation of these duties will be effective to make the distribution process faster and reduce the waiting time for the patients especially at peak periods (Osei-Kyei, et al., 2017)
Calculation of cost and profit with Joseph Painless and Charles Chuck
Joseph and Chuck charge $360 from one patient for 15 minutes treatment.
SRSH has an estimate that each dentist will work 8 hours in a day, five days in a week and 44 weeks in a year. A dentist takes 15 minutes to for Preliminary consultations/check-ups. The graph also shows that 400 patients come for a check up.
The number of patient in year = 44 * 400
In which, 40% pays for doable if the check up and treatment takes more than 15 minutes
= 17600 * 40%
Income by the Joseph Painless and Charles Chuck
= (10560 * 360) + (7040 * 720)
Salary of dentist = 450000 * 2
Net profit = $8870400 – 900000
Calculation of cost and profit with John P. Ford and Mari Olsen
John P. Ford and Mari Olsen charge 240 from one patient for 15 minutes treatment.
SRSH has the same estimation of the patient with hiring of John P. Ford and Mari Olsen. But, the fee is charge buy them is some low form Joseph Painless and Charles Chuck. Ford and Mari will charge 240 from each patient (Caminero, et al., 2013). The calculation of number of participant is same 17600. In this, 10560 will pay 240 and 7040 will pay 480. Hence, income from John P. Ford and Mari Olsen is calculated below:
= (10560 * 240) + (7040 * 480)
Salary of both dentist = 210000 * 2
Net profit by hiring John P. Ford and Mari Olsen
= 5913600 – 420000
On the basis of above calculation of profit and cost, it can be recommended to SRSH that it should hire experienced dentist. It is because the profit is high by hiring Joseph Painless and Charles Chuck.
SRSH will open a restaurant for their patients and family member of patients. In the restaurant, Ordering, delivery and payment processes will be according to the management plan. In this, it is decided that for making the customer order, there will be an order reception in the corner of restaurant. In the context of delivery, it is decided that it will be self-service. Customers have to take their order its self. In the regard of payment, it will be paid at the time of making an order on the reception (Tsakiris, et al. 2013).
In the context of furniture, it is decided that restaurant will contain the furniture for setting 80 customers at a single period. It is because between 6.00 Am to 6.00PM average customers per hour is maximum. In this, in the period 11.00AM to 14.00PM, 190 customers come that is why there is need to the arrangement of 80 persons together. Al the same time, there also requires some other equipment in the restaurant such as Freezers & Refrigerators, Food Preparation Counters, Slicers, Mixers, AC and fans (Langabeer and Helton, 2015).
The restaurant will run in two shifts where one is morning shift, and another is evening shift. In each shift, there will require ten chefs and one manager. Along with this, 2 – 3 cleaners will also be hired by the restaurant. The responsibility of each person will be mentioned at the joining.
On the basis of given information, it is identified that in St Rhidians Surgical Hospital (SRSH), per year per year 190000 patients visit. But, at the same time, it is also found that the flow of the patients remains different during the each set of 50 days.
|Period||Days||Total patients/ visitors in a period|
|1||Day 1 – 50||23000|
|2||Day 51 – 100||43000|
|3||Day 101 – 150||62000|
|4||Day 151 – 200||51000|
|5||Day 201 – 250||11000|
In the current year, SRSH has an expectation to come 191000 patients. The HR manager of SRSH has an estimate that in the running year same patients will come.
At the same time, it is also identified that California security regulation determined some specific regulation in the context of the security staff at the workplace and hospital. In this, it was found that there is a regulation that there should be one permanent security guard in the hospital upon the every 120 visitors. At the same time, regulation also determines that in the organization, there should one temporary security guard for every 80 visitors.
Cost of the permanent and temporary security
Capability of managing visitor by permanent security guard in a year = 250 * 12
Form the above calculation; it is found that a permanent security guard can manage 30000 visitors. SRSH has two permanent security guards and they both can manage 60000 (30000 * 2) visitors per annual. Hence, SRSH will require to the temporary security guard for remain visitors. In the context of the cost of permanent security guard, it is found that Permanent staff cost is $32,000 per annual. In this way, the cost of the two permanent security guards will be:
= 32000 * 2
Remaining visitor = 191000 – 60000 = 131000
Security guard require for 131000 visitors = 131000 / 80
= 1637. 5 (Kerzner, 2013)
Therefore, it is identified that SRSH will require 1637.5 temporary security guards for 131000 visitors. According to California security regulations, the SRSH will pay $140 per day compensation to the temporary security guard. The overall cost of temporary security guard will be
= 1637.5 * 140
Total cost of SRSH for security
= cost of permanent security guard + cost of temporary security guard
= $64000 + $2299250
|Period||Days||Total patients/ visitors in a period||Capacity of permanent security guard||Remaining visitors||Required temporary visitors||Cost of temporary guard|
|1||Day 1 – 50||23000||12000||11000||137.5||19250|
|2||Day 51 – 100||43000||12000||31000||387.5||54250|
|3||Day 101 – 150||62000||12000||50000||625||87500|
|4||Day 151 – 200||51000||12000||39000||487.5||68250|
|5||Day 201 – 250||11000||12000||0||0|
At the same time, SRSH has also plan to install the CCTV. If the hospital installs the CCTV system, then the supervising performance of security guard will increase. According to California security regulations, with the CCTV system, a permanent security guard can supervise 180 visitors per day and a temporary visitor can supervise 140 visitors per day.
Now a permanent security guard will supervise = 180 * 250 (Burke, 2013)
= 45000 visitors
2 permanent security guard will supervise 90000 (45000 * 2) visitors
|Period||Days||Total patients/ visitors in a period||Capacity of permanent security guard||Remaining visitors||Required temporary visitors||Cost of temporary guard|
|1||Day 1 – 50||23000||18000||5000||35.71428571||5000|
|2||Day 51 – 100||43000||18000||25000||178.5714286||25000|
|3||Day 101 – 150||62000||18000||44000||314.2857143||44000|
|4||Day 151 – 200||51000||18000||33000||235.7142857||33000|
|5||Day 201 – 250||11000||18000||0||0|
Total cost of installation of CCTV system = Installation cost + maintenance cost
= $140000 + $12000
Total cost of security of SRSH with CCTV system
= cost of permanent security guard + cost of temporary security guard + cost of CCTV (Larson and Gray, 2013)
= 64000 + 107000 + 152000
Therefore, it can be recommended to the SRSH, it should avoid the CCTV system as the benefit of first year. It is because the annual security guards cost with CCTV system is more than annual security guard cost without CCTV system. But, it is only first year because installation cost is $140000 that will not happen next years. Hence, SRSH can decide on the installation of CCTV system (Schwalbe, 2015).
In the A&E process can be seen below in the SRSH
The above table shows that doctor consult takes more time on a patient. It takes 250 minutes but there are 3 doctors so average time is 8.3 minutes. On the other hand, a patient gives 20 minutes in X-ray session. In SRSH, there are two X-ray teams so that maximum capacity of A&E is calculated on this basis.
Maximum capacity of A&E process each day
= (1440) / (20/2) = 144
Maximum capacity of A&E process one year
144 * 36 = 5184
Annual revenue being generated by the A&E department
= average generate by a patient * total capacity
= $4500 * 5184
Total revenue = 220000000 + 23328000
In this case, it is recommended to SRSH that it should hire more triage consult, doctor consults with increasing the X-ray team. It will help the hospital to increase its capacity in the context of A&E process. Now, demand is 16 patients per day but the hospital is handling only handling 144 patients. Therefore, it is recommended that hospital should concern on increasing A&E staff (Dafny, 2014).
In the context of the first proposal, it is found that SRSH will hire t a newly qualified doctor. It will check the treatment of the patient before discharging them. However, it will be able to check only 25% patient and its cost will be $410000 annual. At the same time, there also has an option to arrange the training program for case technician which cost will be estimated $4500 per technician and total cost is $18000. This option is looking better compared to first option and it will also improve the business value of SRSH (Abdelhak, et al. 2014).
In the context of the current cost of business problem, it is found that six patients face the poor quality case and 2190 patients in years. Due to this, SRSH bears the extra cost of retreatment of the patient. If the retreatment happens before discharging then cost is $900 for one and $1971000 for 2190 patients. On the other hand, if the retreatment happens after discharging patients then cost is $2000 for one patient and $4380000 for 2190 patients. As concerning of this, it is recommended that SRSH should concern on improving the quality operation or process (Burgess and Radnor, 2013). Due to this, hospital is bearing huge cost per annual. Furthermore, in the provided proposals, the company should concern on the second proposal because it is more beneficial and cost effective.
The below figure shows the network diagram of different tasks in the Tokyo project:
(Haux, et al. 2013)
The above network diagram reflects the critical path that is ABEG that may delay the project. It will take 19 days.
|1||Axel and Cindy||5|
|7||Axe, Bubba, Cindy||3|
The below table shows the calculation of the number of days work allocated to each person and equivalent daily rate for each person during this project:
|Task||Human resources||Number of days work allocated||Equivalent daily rate|
|2||Cindy||18||32000/18 = $1778|
|3||Bubba||9||32000/9 = $3555|
Reasons why the project might take longer than 19 days
Typically, there are various reasons that can be caused in delay in the project. In this, poor project scheduling is one of the causes that can affect the time line of the project. In implementation of the project, it can be seen that project manager fail to effectively implement the project timeline. In the same concern of this, lack of cooperation is also cause that can influence the completion of the project within a time period (Gopee and Galloway, 2017). In this project, it is also possible that project team member will not cooperate with the project manager that is why the project may be longer from 19 days. At the same time, there is also the possibility that project can include changes in the cost structure, which can affect the completion of the project within time. During a project, the project manger can get the requirement of more money for supplier and material (Walker, 2015). Hence, it can cause of delays. In additionally, in the delay of the project, outside influence a major aspect that is uncontrolled by the project manager and [project team. For example, rainy weather can be the cause in delay a construction project.
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