Examination Rooms Max No.

of patients that can be handled by examination rooms =

(6*3hours*60mins *5days)/20 mins = 270 patients/week
3 hours as the timings are between 1pm - 3pm
Surgeon Capacity:
Maximum no. of operations that can be performed by 10 surgeons per week: (7 operations a
day)* 10 surgeons *5(days/week) = 350 operations/week
Number of beds needed in a day = 35 * 4 (35 new patients; 35 patients being operated; 70
- recuperating) = 140
Since number of available beds = 89, this is the bottle neck.
Capacity Utilization (as calculated above) = 83.51%
a. Increased number of operations (20% increase in capacity) = 0.2*7600 Mn = 1520 Mn
Costs:
Assumption: The clinical cost increases by the same % as the capacity
Hospital Cost (remains unchanged) = 8.5 Mn
Clinic Cost (increases by 20%) = 3.5*1.2 = 4.2 Mn
Revenues:
Hospital Revenue = Total no. of operations * no. of days* cost per day = 9120*4*320
= 11.67 Mn
(As 7600 (no. of operations in a year earlier) * 1.2 (Increased capacity) = 9120)
Clinic Revenue = Total no. of operations * cost per day (i.e 650+0.2*300 for general
anesthesia in 20% cases) = 9120*710 = 6.4752 Mn
Profits = 5.45 Mn
Increase in profits = 74.45%
(Initial Profits = (15.124 12) Mn = 3.124 Mn)