1. How well is the hospital currently utilizing its beds?

Shouldice beds are only fully utilized three days per week, but doctor
operate five days: so the question of utilization has these two perspectives.
Utilization = Actual beds utilized/Available capacity = 450/(90*7) = 0.71 = 71%
2.

Develop a table to show the effects of adding operations on

Saturday. Assume that 30 operations would still be performed each
day. How would this affect the utilization of the bed capacity? Is this
capacity sufficient for the additional patients?
Beds Used under current opertaions(150 per week)
Check
in
Monday

Monday

Tuesday

Wed

30

30

30

30

30

30

30

30

30

30

30

Tuesday
Wed
Thu

Thu

Fri

Fri

Sat

Sun

30

None

Sat

None

Sun

30

30

Total

60

90

30
90

90

60

30

Beds Used with Saturday surgery(180 per week)

Monday
Tuesday Wed Thu
Fri
Sat
Check

30

Sun

in

Monday

30

Tuesday

30

30

30

30

30

30

30

30

30

30

30

30

30

Wed
Thu
Fri
Sat

30

None

Sun

30

30

Total

60

90

30
90

90

90

60

60

Utilization = 540 / (90*7) = 0.857 = 85.7%

As Per the table above if surgery is added on Saturday and held at 30 per
day, then capacity utilization would increase to 85.7%. Given utilization is
still under 100%, current capacity is sufficient for the additional patients to
be treated on Saturday.

3. If operations are performed only 5 days a week, 30 per day, what is the
effect of increasing the number of beds by 50%? How many operations
could the hospital perform per day before running out of bed capacity?
How well the new resources would be utilized relative to the current
operation? Recalling the capacity of 12 surgeons and five operating
rooms, could the hospital really perform this many operations? Why?

If beds are increased by 50% (to 135) but surgery is held at 30 per day,
the added capacity is wasted.
With the added beds, surgeries could move from 30 per day to 45 per
day.
A 50% increase in bed capacity needs to be matched with 45 surgeries
Monday, Tuesday, Wednesday, and Thursday to fully utilize facilities 4
days per week.
If 30 surgeries are performed each day in 5 rooms, then 6 are performed
in each room. To perform 45 per day, the rooms will need to be occupied
9 hrs per day or more rooms will need to be added. Extending the hours
may complicate the smooth recovery process used at Shouldice. More
operating rooms are recommended.

4. If adding bed capacity costs about $100,000 per bed, the average rate
charged for the hernia surgery is $2,400, and surgeons are paid a flat
$800 per operation, can Shouldice justify any expansion within a 5year time period?
Beds Used with 50% increase in beds(225 per week if surgery
keeps up)
Check
in
Monday

Monday

Tuesday

45

45

45

45

45

45

45

45

45

45

45

Tuesday
Wed

Wed Thu

Thu
Fri

Fri

Sat

Sun

45

None

Sat

None

Sun

45

45

Total

90

135

45
135

135

90

45

45

Several perspective on cost exists , just as do capacity

options. Here are some hypothetical costs for one capacity
option; 15 more surgeries per day
19500
Income for 15 more surgeries at
$1300 each=

Flat cost @$600

Daily Income

9000
10500

Five surgeries per day* 5

days*50 weeks
=1250 surgeries
Bed Cost over 5 Years=($1000000*45
beds)/5 years=
Net income per year

13125000
900000
12225000

If the expansion decision is made on the basis of ROI (Return On

Investment), this is a very good investment.