Each of the four questions' solutions are included in the 4 tabs following this sheet.

Question 1 asks for current utilization. The answer is expressed as a value not a narrative

Question 2 has three parts, a) construct a table, b) new utilization number, and c) is the new capacity sufficient for the number o
What they are asking is will the hospital have sufficient resources to handle the extra load of operations.

Question 3 has three parts.

The first question asks for you to consider a 50% increase in beds. Here you needed to set up a new table. Judging by some ass
or used the templates provided without changing the values missed the values needed to answer the question.
I included the author's maximum surgeries (52 per day) but disagree with it. If you solved using the 50% increase as the basis
for your decisions and answers, that was sufficient.
You are then asked to identify the number of operations possible before the hospital runs out of bed capacity.

The second part asks how well the new resources (increase in beds) would be utilized. Looking for a new utilization number he

The third asks if the hospital can really perform this many operations and why. This is where you needed to look past the bed
capacity and at the surgeon and operating room capacities. Many of you addressed this. The most common answer was that
this number of operations could not be accommodated because the o.r.s would be maxed out. Remember that there can be other
solutions, overtime, additional staff, etc. The o.r.s are there and aren't going anyplace at the end of the shift. Trying to
maximize the utility of fixed assets is a profit maker in most cases. So it is possible, but adjustments are needed.

You will notice in the solutions that the truly correct answer starts with an increase to 134 beds, not 135. Why?
"Why does 1.5 x 90 = 134?" Go back to the case write up and see if you can figure out why Shouldice would use 134 rather tha

Question 4 asked for the payback period. Some of you looked at it as a payback using NPV and a few other
analyses, but the answer was a much simpler calculation. In this type of payback, all that is needed is to
look at how long it will take for the revenues to pay off the construction costs. After paying the doctors,
the resulting weekly income is divided into the construction amount to come up with the weeks for payback.
Note that the additional weekly surgeries are 75 per week. The original was 150 per week and the new
capacity using 135 beds results in 225 operations.
y sufficient for the number of patients.
of operations.

table. Judging by some assignments, those who did not

50% increase as the basis

a new utilization number here.

eeded to look past the bed

ommon answer was that
mber that there can be other
the shift. Trying to
s are needed.

135. Why?
ice would use 134 rather than 135.
Question 1:
Mon. - Friday Operations with 90 beds (30 patients per day)

Beds Required Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Monday 30 30 30 150 = Total Operations per Week
Tuesday 30 30 30 30 =Operations per day
Wednesday 30 30 30 630 = Available Bed-Days
Check-in Thursday 30 30 30 450 = Used Bed-Days
Friday 71.43% = Bed Utilization
Saturday 12.5 = Operations per Surgeon per week
Sunday 30 30 30 2.5 = Operations per surgeon per day
Total 60 90 90 90 60 30 30 30 = Operations per Operating Room per week
Utilization 66.67% 100.00% 100.00% 100.00% 66.67% 33.33% 33.33% 6 = Operations per Operating Room per day
Question 2:
Mon. - Saturday Operations with 90 beds (30 patients per day)
Beds Required
Monday Tuesday WednesdayThursday Friday Saturday Sunday
Monday 30 30 30 180 = Total Operations per Week
Tuesday 30 30 30 30 =Operations per day
Wednesday 30 30 30 630 = Available Bed-Days
Check-in Thursday 30 30 30 540 = Used Bed-Days
Friday 30 30 30 85.71% = Bed Utilization
Saturday 15 = Operations per Surgeon per week
Sunday 30 30 30 2.5 = Operations per surgeon per day
Total 60 90 90 90 90 60 60 36 = Operations per Operating Room per week
Utilization 66.67% 100.00% 100.00% 100.00% 100.00% 66.67% 66.67% 7.2 = Operations per Operating Room per day

Yes, the new capacity is sufficient because the number

of available beds, surgeon hours and operating room
hours have not been exceeded.
Question 3a:

Mon. - Friday Operations with 134 beds This is the CORRECT solution There are 134 beds because patients have roomates and 135 beds would leave someone without a room mate

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Monday 44 44 44 225 = Total Operations per Week
Tuesday 44 44 44 44 = Operations per day
Wednesday 44 44 44 938 = Available Bed-Days
Check-in Thursday 44 44 44 660 = Used Bed-Days
Friday 70.36% = Bed Utilization
Saturday 18.75 = Operations per Surgeon per week
Sunday 44 44 44 3.67 = Operations per surgeon per day
Total 88 132 132 132 88 44 44 45 = Operations per Operating Room per week
Utilization 65.19% 97.78% 97.78% 97.78% 65.19% 32.59% 32.59% 9 = Operations per Operating Room per day

Accepting that each surgery and its preperation time is 1 hour,

capacity of operating rooms has been exceeded
by 1 hour per day (still assuming an 8 hour work day)
This could be handled by increasing o.r. staff or increasing
the work week to 45 hours resulting in 5 hours of over time pay.
(I assume that Canada's work week is 40 hours.)

The true constraint appears to be the availability of operating rooms.

Question 3a: This solution is acceptable at almost full credit

Mon. - Friday Operations with 135 beds
Beds Required
Monday Tuesday Wednesday Thursday Friday Saturday Sunday
Monday 45 45 45 225 = Total Operations per Week
Tuesday 45 45 45 45 = Operations per day
Wednesday 45 45 45 945 = Available Bed-Days
Check-in Thursday 45 45 45 675 = Used Bed-Days
Friday 71.43% = Bed Utilization
Saturday 18.75 = Operations per Surgeon per week
Sunday 45 45 45 3.75 = Operations per surgeon per day
Total 90 135 135 135 90 45 45 45 = Operations per Operating Room per week
Utilization 66.67% 100.00% 100.00% 100.00% 66.67% 33.33% 33.33% 9 = Operations per Operating Room per day

Accepting that each surgery and its preperation time is 1 hour,

capacity of operating rooms has been exceeded
by 1 hour per day (still assuming an 8 hour work day)
This could be handled by increasing o.r. staff or increasing
the work week to 45 hours resulting in 5 hours of over time pay.
(I assume that Canada's work week is 40 hours.)

The true constraint appears to be the availability of operating rooms.

Desired payback
period = 5 years

Mon. - Friday Operations with 134 beds 134 beds does not represent an exact 50% increase (see problem 3 as well), Why 134 and not 135?
Beds Required
Monday Tuesday WednesdayThursday Friday Saturday Sunday
Monday 44 44 44 220 = Total Operations per Week
Tuesday 44 44 44 44 = Operations per day
Wednesday 44 44 44 938 = Available Bed-Days
Check-in Thursday 44 44 44 660 = Used Bed-Days
Friday 70.36% = Bed Utilization
Saturday 18.33 = Operations per Surgeon per week
Sunday 44 44 44 3.67 = Operations per surgeon per day
Total 88 132 132 132 88 44 44 44 = Operations per Operating Room per week
Utilization 65.19% 97.78% 97.78% 97.78% 65.19% 32.59% 32.59% 8.8 = Operations per Operating Room per day

Cost of expansion Beds 44

Cost/Bed $100,000
Total $4,400,000

Incremental Revenue Rev/Oper $1,300

Surgeon $600
Incr Rev $700

Additional Oper/Week 74 (at 90 beds 150 operations per week were performed, now 224; 224-150 = 74)
Rev/Week $51,800
Payback 84.9 Weeks
1.6 Years (based on 52 weeks per year)

Alternative solution at a straight 50% increase. Acceptable answer at a slightly less than maximum point value.

Mon. - Friday Operations with 135 beds

Beds Required
Monday Tuesday WednesdayThursday Friday Saturday Sunday
Monday 45 45 45 225 = Total Operations per Week
Tuesday 45 45 45 45 = Operations per day
Wednesday 45 45 45 945 = Available Bed-Days
Check-in Thursday 45 45 45 675 = Used Bed-Days
Friday 71.43% = Bed Utilization
Saturday 18.75 = Operations per Surgeon per week
Sunday 45 45 45 3.75 = Operations per surgeon per day
Total 90 135 135 135 90 45 45 45 = Operations per Operating Room per week
Utilization 66.67% 100.00% 100.00% 100.00% 66.67% 33.33% 33.33% 9 = Operations per Operating Room per day

Cost of expansion Beds 45

Cost/Bed $100,000
Total $4,500,000

Incremental Revenue Rev/Oper $1,300

Surgeon $600
Incr Rev $700

Additional Oper/Week 75 (at 90 beds 150 operations per week were performed, now 225; 225-150 = 75)
Rev/Week $52,500
Payback 85.7 Weeks
1.6 Years (based on 52 weeks per year)